Economics Quote by Adair Turner, Baron Turner of Ecchinswell
“In economics, when you put together a highly elastic thing and a highly inelastic thing, you create extraordinary potential for turbulence, volatility, and for unstable prices.”
About This Quote
Source Speech: Economic Forum, 2015
Combining highly elastic and inelastic elements creates market instability and price swings.
In simple terms: Mixing flexible and rigid parts leads to volatile prices.
Beware of pairing extremes in markets.
Themes
Mood
Type
When to use this quote
- investment strategy
- policy design
- commodity trading
- risk assessment
Key Concepts
Questions to Reflect On
- How do you mitigate instability when mixing elastic and inelastic assets?
- What safeguards can stabilize prices?
Such pairings can also generate opportunities for arbitrage.