Raghuram Rajan Warns of Global Economic Fragilities

The transcript discusses the current economic conditions, highlighting potential fragilities such as incipient inflation and financial sector vulnerabilities. It examines the impact of long-term accommodation on leverage and asset bubbles, particularly in bonds, and the role of central banks in managing these issues. The challenges faced by policymakers in identifying and addressing asset bubbles are also explored, emphasizing the importance of timely withdrawal of accommodation to prevent forced actions.

In what ways does the text suggest that the 2001 stock market bubble and the subprime mortgage problem differ?

What is the suggested approach for policymakers regarding accommodation and asset prices?