Economy Booms: Credit and Economy

economy booms: That's the message from Keynes, Hayek and Minsky, according to Market Watch. Easy credit helps the productive economy grow, but if taken too far it can lead to dangerous bubbles in stocks, housing or other assets that too often end with a big bang and a credit squeeze that hits the innocent and guilty alike. Why do we care Because the flow of credit may be the most important variable in whether the economy booms or busts. The Fed is almost always taken by surprise when the supply of credit dries up and the economy plunges into recession. Decisions about lending and borrowing are, at the bottom, emotional decisions, largely hidden from the view of economists and policy makers. The Minsky moment always sneaks up on the Fed because it doesn't have good data on the supply of credit. (news.financializer.com). As reported in the news.