The central bank’s correct assessment and evaluation of supply and demand conditions in all sectors of the economy. – As a rule, it cannot be assumed that a central bank is better able to assess the appropriateness of price changes than the market. Therefore, a central bank (contrary to a constantly repeated claim) can hardly identify speculative bubbles in advance and put a stop to their further inflation; quite apart from the fact that it would not be able to do so without unintentionally influencing the real economy. – See stock bubble, bubble, speculative, stock market price, boom-bust cycle, stock market fever, crash, dotcom bubble, gambling effect, hindsight, real estate bubble, myopia, market presence, central banking, Mississippi frenzy, speculative bubble, overexposure, exuberance, unreasonable, wealth effect, confidence hypertrophy.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/