Economics

The most interesting matter about the article is the difficulty in handling existing bubbles in the economy.  Identifying these bubbles may seem to be simple but manipulating them is the major deal.  The gravity of the effects of these entities was very well felt through the problems that it caused the Federal Reserve and the economy in general.  The dilemma on deciding whether or not to prick these bubbles gives rise to various views for the welfare of the economy.  Attention was also drawn to the said matter because there is still no concrete way to deal with the bubbles and that the central bank according should not interfere with it.  The conventional solutions as stated in the article do raise queries.  Its like every bubble has this case-to-case basis of arriving at a solution in utilizing it correctly. 

In many ways or so, bubbles are related to economics.  As it is defined, economics deal with the proper allocation of the scarce resources.  In line with this, Federal Reserve aids in ensuring that there is good employment rate as well as regulating the financial system of the economy. Several concepts are linked with any kind of existing bubble.  The bubbles also have an effect on how economies work and how economic activities move about.  There is a possibility that pricking a bubble can worsen a financial crisis thus policy makers will work on it through the monetary and fiscal policies.  Monetary policy can increase or decrease the total money supply while the latter can be in the form of taxation and government expenditure. These policies are economic concepts which can be employed if bubbles cause damage to the economy.  Either way, both policies should aim to stabilize the economy alongside with regulatory measures.  A crash of a bubble can lessen the wealth of an economy, increase financial risks and at the same time, cause false allocation of resources.  It is also possible that bubbles occur because of an economys current state.  Bubbles are inevitable in any economy.  The central bank must make sure that bursting or letting the bubbles float on its natural course will cause a positive impact in the economy.