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Assets Quote by Alan Greenspan

“But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?” quote by Alan Greenspan
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“But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?”

Alan Greenspan

About This Quote

Source Speech: Economic outlook, 2010

Identifying irrational exuberance requires recognizing unsustainable asset price spikes and potential prolonged downturns.

In simple terms: Spotting irrational exuberance involves seeing overvalued assets and possible long declines.

Key Takeaway

Monitor market signs for unsustainable growth.

Themes

economics valuation risk

Mood

analytical cautious

Type

economic philosophical

When to use this quote

  • investment decisions
  • policy planning
  • risk assessment

Key Concepts

asset bubbles financial cycles

Questions to Reflect On

  • How can you detect early bubbles?
  • What safeguards mitigate prolonged contractions?
A Different Perspective

Predicting timing is difficult.

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