Back in 2006 and 2007, commentators (including this one) warned about the rise in stock prices, housing credit and other forms of risky lending in several advanced economies. House prices are rising again. Stock indices have broken records. Derivatives with three-letter acronyms are back. So are long-forgotten old favourites, such as the “cov-light” loan (don’t ask). Should we be worried?

Not really. This time really is different. I do not mean that the world has entered a new phase allowing us to use silly arguments, such as a change in demography, to defend high and rising asset prices. My point is a different one: if some of these bubbles burst, as they undoubtedly will, I do not see similarly devastating effects as I did last time.

For starters, what matters for economic stability is not the level of asset prices, and their subsequent deflation, but leverage and contagion. By 2007, several advanced economies had reached the final third stage in Hyman Minsky’s financial instability hypothesis. This was what the famous economist called Ponzi-finance – a snowball-type financial racket that was bound to end badly. The bursting of the bubble triggered bank failures, which in turn had contagion effects throughout the financial system. The US subprime mortgage market was, of course, the most extreme case of late-stage Ponzi-type finance, which ultimately triggered a near-meltdown of the global financial system.