Not all bubbles present a risk to the economy

These days you read many stupid things, but this one is getting the price for the week. According to Mishkin in yesterdays FT there is a difference between a "Credit boom bubble" and an "pure irrational exuberance bubble".

His "proof" for this is:

For example, the bubble in technology stocks in the late 1990s was not fuelled by a feedback loop between bank lending and rising equity values; indeed, the bursting of the tech-stock bubble was not accompanied by a marked deterioration in bank balance sheets. This is one of the key reasons that the bursting of the bubble was followed by a relatively mild recession. Similarly, the bubble that burst in the stock market in 1987 did not put the financial system under great stress and the economy fared well in its aftermath.

So the fact that we had a mild recession in 2001/2002 have nothing to do with the very loose monetary policy in the after match laying the foundation for the current economic and financial crisis. Nice for the central bankers to have a "good academic" argument for keeping interest rates low for en extended period to support higher equity markets ....