Allison Schrager, Columnist
Whether valuations fall suddenly or gradually, the industry is due for a reckoning, and the consequences for the economyare dire.
Allison Schrager is a Bloomberg Opinion columnist covering economics. A senior fellow at the Manhattan Institute, she is author of “An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk.”
Markets today pose a new existential question: Can there be a bubble in something if it has no price?
As a believer in efficient-ish markets, I am uncomfortable calling anything a bubble. Recognizing a bubble requires spotting an asset or asset class that is objectively overvalued before everyone else does. Making this determination is almost always impossible in real time, even if it’s screamingly obvious in hindsight. And that’s in public markets, where prices are easily observed and constantly updated as investors form views and incorporate information.
