The Economics of Money, Banking and Financial Markets 4th Edition by Frederic Mishkin

Exercise 8

In the late 1990s, as information technolog)' advanced rapidly and the Internet was widely developed, U.S. stock markets soared, peaking in earlY₂001. Later that year, these markets began to unwind and then crashed, with many commentators identifying the previous few years as a "stock market bubble." How might it be possible for this episode to be a bubble but still adhere to the efficient market hypothesis?