The Economics of Money, Banking, and Financial Markets 10th Edition by Frederic Mishkin

Exercise 19

In the late 1990s, as information technolog)' advanced rapidly and the Internet was widely developed, U.S. stock markets soared, peaking in early 2001. 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?