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Inefficient markets

Lessons of depression

By Edward Chancellor   September 2002

Lessons of depression

“Sir” Alan Greenspan, the chairman of the Federal Reserve, allowed the stock market bubble to inflate because he thought he could control its aftermath. This view derives from a belief that the depression of the 1930s was not caused by the preceding speculative boom but was the result of poor policies by the government and central bank. Following the continuing rout in the stock market and signs that the US economic recovery is petering out, we have reached the point when this historical thesis is about to be severely tested.

In a recently published book, Rethinking the…

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