The 10th anniversary of the financial crisis: the most difficult thing to do in a bubble: if the financial crisis has been around for the 10th anniversary since 2007.

Did humans tame the financial crisis?

Is the world economy more stable?

What has China learned from that?

Where is the next financial crisis?

Ftchinese.com recently organized a discussion on the 10th anniversary of the financial crisis, and related to the editorial issues, and contacted xu jinjin.xu@ftchinese.com.

"It's expected."

It is said that Milton friedman, a famous economist at the university of Chicago, once gave a similar answer when asked about the biggest challenge to inflation.

Expectations, like a invisible scratching a concept, is real, real to micro level every a person's behavior decision-making, production and consumption of aggregation and macroscopic level, influence but has profound and lasting impact.

Had a monetarist experts point out that inflation itself is not terrible, is nothing but wealth from one department to another department of economic transfer, transfer from one population to another crowd.

What is really scary is the expectations of inflation, the actions of consumers, producers, and even policymakers themselves, and the distortions and distortions that occur in inflationary expectations.

What is more, it is certain people under inflation expectations for themselves for the future and the relative position in the social status and the quality of the profound change in outlook, so as to endanger the development of society, harmony, and stable.

In a sense, asset bubbles and inflation have some similarities.

On the one hand, inflation involves the rise in the price of mass consumer goods in the economy, while asset bubbles involve a price increase in a particular asset class.

On the other hand, inflation is often not caused by changes in the price of economic fundamental products, but reflects the expectations of the manufacturers and consumers for the future price level.

That is to say, in a given under the premise of fundamentals of consumer goods prices unchanged, only participants for the future price changes in the economy is expected to be a bit of disturbance, is likely in the absence of exact cause, cause the real inflation.

Similarly, an important feature of asset bubbles is self-fulfilling expectations.

Academic research suggests that, in the ample liquidity in the market, the lack of effective market under the environment of shorting mechanism, even for the future asset prices expected to happen slightly raised, can also cause a large scale of asset bubbles.

In this sense, the rapid rise in asset prices, or so-called asset bubbles itself is not so terrible, the real terrible is due to higher prices and form of strong and difficult to reverse the expected in the short term, and prompted by an expected prices to rise further.

If inflation is the analogue, the policy layers are often hard to reverse, and are inflationary expectations.

Often mentioned by monetary policy history of the federal reserve chairman Paul volcker, once the fed's benchmark interest rates, which is America's central bank raised the benchmark interest rate to 20% annualized rate of astonishing level, the main reason is that, can't reverse the participants for the strong and long lasting future inflation expectations.

And inflation is different, because does not directly cause the social asset bubble rising cost of low-income groups in daily life or daily consumer purchasing power decline, so some people think asset bubbles are not related to social fairness and stability.

But the idea has obvious flaws.

In fact, on the contrary, asset bubbles are likely to have a greater impact on wealth inequality and inequality than inflation.

First, asset prices in asset bubbles have risen so much that in the short term the level and speed of wealth differentiation has greatly outstripped inflation.

And, because in the process of asset speculation, participants such as initial wealth and financial awareness endowment differences, often through investment to enlarge the leverage effect in the process of asset bubbles, further accelerate wealth differentiation process.