Speculation and Innovation

Economic bubbles and the corresponding speculation that accompany them inevitably end in a financial bust. Depending on multiple factors, the consequences of these popped bubbles can be grave or transient.

When specuation infects the credit system that fuels the economy, particularly when its object offers no prospect of increased economic productivity, the outcome of the collape is almost always unequivocally negative, and possibly catastrophic. But when the damge of speculation is limited to the market for equity and debt securities, the adverse economic consequences may be muted.

What's more, when the object of speculation is a transformational technology, a new economy can emerge from the wreckage. That's why, for example, the consequences of the technology bubble in 2001, which was based on unleashed enthusiasm for the Internet, were radically different from those of the housing bubble in 2008. 

So what can we learn from the history of productive speculation that would help us anticipate where and how the next bubble may emerge and how we should respond to it?

This panel discussion from the Institute's "Human After All" conference in Toronto featuring Bill Janeway, Steve Fazzari, Ramana Nanda, and Peter Jungen, moderated by John Cassidy, addresses these key questions about innovation - and more.

(Please see below for the slide presentations from the speakers.)

 

AttachmentSize
Nanda Presentation296.06 KB
Fazzari Presentation131.28 KB
Janeway Presentation1.01 MB