Re: Japan/recent decisions

[Paul Davidson <pdavidso@xxxxxxxxxxxxxxxxxx>]

On Sat, 23 Sep 1995, Michael Perelman wrote:
> >
> Paul, if the exchange rate is the problem, then it is many orders of
> magnitude off any historical exchange rates, suggesting a bubble.

Michael: What determines the "proper" (non-bubble) exchange rate? Some real
fundamental sch as purchasing power parity?


> Look, you have a point if you say that bubbles cannot be measured.  But
> when things get way out of kilter [an obviously imprecise statement], you
> can infer a bubble.
>
> You have some good ideas, but you push them to such dogmatic extremes that
> you do yourself a disservice.


Interesting comment. Unfortunately when you do not make a stark statement
, the reader (or listener) does not think you said something that is
completely different. You have to shock people into rethinking their
position.  Otherwise, the easy response is just that this is an
idiosyncratic variant of what everyone else has said. Only by making
things black or white, can you make people realize you are not just
another shade of grey!

Paul D.