BCG Henderson Institute

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This research was published on July 15th, 2021 in Fortune

Inflation has dominated the economic debate of recent months, ranging from fears about runaway price growth to fears that tighter monetary policy could smother the recovery prematurely. Yet neither inflation nor hawkish “policy errors” by the Federal Reserve have ended an economic expansion in the past 30 years — bubbles have. And while the financial losses and economic headwinds that follow in the wake of bubbles have given them a bad reputation, there is more to bubbles than meets the eye.