Re: How come the bank failure destroy the wealth???
Good question (for once) and even better answer.
Thanks
But because bubbles produce an increase in GDP some economist argue that the economy is growing, when in reality the increase in GDP is not real economic growth, just the result of economic activity that squanders resources.
And the worst is that's not only statistics to please economists. During the boom, it becomes easier to invest in the long term. Many new investments start. These investments hire people, create capital and all that. The "prosperity feeling" goes beyond silly statistics: people really feel they're getting richer, while actually it's the other way around.
Messing with prices is really bad. We base a lot of our decisions on them.