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Minsky's theory is "most applicable to a closed economy". Some bubles might have to collapse by now already, but the process of globalization spreads markets and the pool of outsiders entering them. Hence, the bubbles may keep growing. The recent stock market "corrections" are good indications of this process: the Shanghai dip of 3 weeks ago was provoked by rumours that Chinese government may try to curb market speculations more seriously.

The global economy is a closed economy, by definition.

"It's the statue, man, The Statue."

by Migeru (migeru at eurotrib dot com) on Tue Mar 20th, 2007 at 07:51:22 AM EST

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