I disagree with the BIS on the issue of interest rates though: they’d like more rises to kill off bubbles. I think significantly more direct action is required that actually tackles the issue and does not penalise ordinary people yet again for something not of their creation. So, significant rises in corporation tax for large companies; wealth taxes; a variable rate financial transaction tax with a rate that rises in periods of financial volatility and more action on bank capital are required, now. These might work. Interest rate rises will just push households into default.
So Robert Shiller tells us that more speculation, the ability of people to sell short in futures and options markets, is what kills bubbles. The Senior Lecturer tells us that we must reduce speculation in order to kill bubbles.
One has the Nobel for economics the other teaches economics in a British university. Isn’t the British student getting a good deal.