Theories of stock prices and the Greenspan-Bernanke doctrine on stock market bubbles

摘要

The Greenspan-Bernanke doctrine on how the Federal Reserve responds to stock market bubbles reflects an ideological allegiance to the rational markets theories of stock prices while reluctantly accepting the analytical insights of the speculative markets theories of the Post Keynesians and Galbraith in acknowledging that bubbles occur. The strategy of supplying ample liquidity when a bubble bursts has some compatibility with Davidson's Post Keynesian role of the Federal Reserve as a credible market maker. But Greenspan and Bernanke reject Galbraith's policies for dealing with an inflating bubble.