The Overstone Cycle of Trade

There's been a little bit of reconsideration after the global financial crisis as to just how important finance is to understand the business cycle and the real economy. I think it has been understood for hundreds of years if not back to the ancient Greek philosophers that trading and asset valuations is actually a deeply psychological phenomenon. So this connects to this idea of narratives. That there's a narrative that a bubble does usually have its roots in some kind of sound fundamental or a shift in fundamental, let's put it that way. But it ultimately becomes an overreaction and that overreaction in itself is sort of a self-perpetuating element.