Stores don't order merchandise unless they think they can sell it right away. Manufacturers and builders don't produce unless they have buyers lined up. My business contacts describe this as a paradigm shift and they believe it's permanent.

My bottom line is that monetary policy should react to rising prices for houses or other assets only insofar as they affect the central bank's goal variables - output, employment, and inflation.

It slightly worries me that when people find a problem, they rush to judgment of what to do.

After adjusting for inflation, the average income of the top 5% of households grew by 38% from 1989 to 2013. …By comparison, the average real income of the other 95% of households grew less than 10%.

The average net worth of the lower half of the distribution, representing 62 million households, was $11,000 in 2013. About one-fourth of these families reported zero wealth or negative net worth, and a significant fraction of those said they were "underwater" on their home mortgages, owing more than the value of the home. This $11,000 average is 50 percent lower than the average wealth of the lower half of families in 1989, adjusted for inflation.

Stores don't order merchandise unless they think they can sell it right away. Manufacturers and builders don't produce unless they have buyers lined up. My business contacts describe this as a paradigm shift and they believe it's permanent.

We need to increase the transparency of shadow banking markets so that authorities can monitor for signs of excessive leverage and unstable maturity transformation outside regulated banks.