Krugman: What's Missing In Financial Reform

03/18/2010 05:12 am ET | Updated May 25, 2011

Reform, in other words, probably can't prevent either bad loans or bubbles. But it can do a great deal to ensure that bubbles don't collapse the financial system when they burst.

Bear in mind that the implosion of the 1990s stock bubble, while nasty -- households took a $5 trillion hit -- didn't provoke a financial crisis. So what was different about the housing bubble that followed?


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