Mr Mishkin returned to the theme at Jackson Hole last month, echoing Mr Greenspan's eventual line.
Mr Mishkin argues that globalisation itself stimulates the reforms needed to make it work.
Whether Mr Mishkin is right to be so optimistic about what policy can do once bubbles have burst remains to be seen.
Mr Mishkin, a former Fed governor, draws a contrast between credit-boom bubbles and irrational exuberance in stockmarkets, such as the dotcom bubble.
Mr. Mishkin and his intellectual comrade, Mr. Bernanke, insist the Fed will.
But, said Mr Mishkin, Japan's policymakers made a lot of mistakes: the imbalances in its banking industry were not sorted out, so they got worse.
Yet, for all that, Mr Mishkin stuck to the Fed's line that it should not have tried to restrain house prices with higher interest rates.
Mr Mishkin did not deny that those cuts inflated house prices.
Mishkin and his team forcast that rising interest rates will cause losses at the Fed which may in turn tip the U.S. into an unsustainable deficit spending path.
As Mr Mishkin made clear at Jackson Hole, estimating by how much is an inexact business, even if you knew how far house prices would drop, which no one does.
Becca Mishkin, a resident of the Upper West Side in Manhattan, doesn't have a regular landline phone, so she relied on her cell phone to keep in touch with family.
"Small losses in one sector of the credit market can have an outsized impact on aggregate economic activity, " said Federal Reserve Board Governor Frederic Mishkin at a conference in New York Friday.
Powell, of Maryland, to be a Member of the Board of Governors of the Federal Reserve System for the unexpired term of fourteen years from February 1, 2000, vice Frederic S. Mishkin.
The big relief, in Mr Mishkin's view, is that falling house prices translate only slowly into lower spending, so central bankers can soften even sharp house-price declines provided that they cut interest rates early.
In other words, Mr Mishkin suggests the Fed should cut interest rates before a deflating housing bubble affects the real economy, even though it resisted acting before an inflating bubble created dangerous economic distortions.
However, Takatoshi Ito of Tokyo University and Frederic Mishkin of Columbia University argue that whereas inflation-rate targets may be best in normal times, once an economy is suffering deflation there is a stronger case for a price-level target because it requires a compensating period of higher-than-normal inflation.
On February 22, 2013, Frederic Mishkin, Peter Hooper, James Hamilton and David Greenlaw published Crunch Time: Fiscal Crises and the Role of Monetary Policy, an 86-page paper that predicts the Fed will stare down the barrel of a few hundred billion dollars of losses when interest rates rise.
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