Paul Krugman blames the wave of deregulation for the succession of speculative bubbles since the 1980s.
Now of course Krugman forgotten more macro than I ever thought about learning, so take this as an amateur suggestion awaiting vetting by professionals. But it seems to me that something else happened in the 1980s: the Great Moderation. Once we emerged from the Volcker interest-rate shock, we had a very long run of relatively low macroeconomic volatility.
If the threat of recession-linked declines in asset prices put a brake on speculation, and if that threat receded, then you’d expect speculation to get more … bubbly, wouldn’t you?
That doesn’t man deregulation, or a dozen other factors, weren’t also in the mix. But if market participants are confident that macroeconomic managers can prevent recessions, they why shouldn’t they bid the prices of assets that lose value when the economy tanks?