“A bubble is good for growth because it creates a low cost environment for experimentation.”
Here is the full argument. I am prepared to believe that the government should not try to regulate or otherwise restrict bubbles. Why should we think that governments can outguess traders? And bubbles help finance socially worthwhile ideas that may not have high private returns. But would I wish that traders had less “bubbly” temperaments?
Thanks to www.politicaltheory.info for the link.