Borio and White, in particular, building upon Kindleberger’s classic historical analysis of bubbles and panics,3 had suggested that periods of inflation and output growth stability may sow the seeds of future instability, by engendering in the general public the erroneous notion that a new and much more stable era had been entered, in which the old rules did not apply any longer. In this respect, it is interesting to notice that the Great Moderation period had been characterized not only by large decreases in macroeconomic volatility for both inflation and output growth, but also by a dramatic compression of risk premia across several asset classes, which is compatible with the notion that economic agents were indeed regarding the volatility decreases as part of a “new norm” characterized by permanently more stable macroeconomic dynamics. With the benefit of hindsight – and of the decisive “test” of the respective validity of the different viewpoints provided by the crisis – it is today easy to appreciate the soundness of Borio and White’s position. The Great Moderation years had been characterized, compared with the previous portion of the post-WWII era, by a significantly more frequent occurrence of asset price bubbles and subsequent crashes. A longer-term perspective focusing on the last two centuries even shows that the occurrence of asset price booms and busts under conditions of price stability, far from being a “fluke” of the Great Moderation era, have in fact been historically quite common.
14 Customer-oriented attitude has induced the public sector to open itself to the public and private partnership solutions. One of its manifestations in Singapore is the ability to apply for a passport at the photo-shop, immediately after the passport picture is taken. Another significant factor, which stimulates the growth of both e-administration and e-economy, is the penetration of innovation and search for new applications for technologies in use between the private and public sectors. For instance, the abovementioned RFID technology was initially used to mark goods in transport and storage, as a technique more advanced than the bar code. China, which has implemented the RFID standard as a result of the efforts of Wal-Mart, the world-largest retailer, is currently considering its use in blood banks to track the location of blood batches. Another use of the RFID technology — also in the health care sector — is currently tested at the orthopaedic ward of the Singapore General Hospital. For the duration of hospitalization, the patient receives a band that facilitates tracing the patient’s location, whereas a built-in thermosensor measures the temperature without bothering the patient. Portable devices provide the nurses and physicians with an ongoing access to information on the patients. Moreover, there is a possibility to integrate the system with 15 monitoring of the heart action and blood pressure . A completely different, although slightly controversial, use of RFID has been found at the prosecutor’s office in Mexico, whereby a chip is implanted under skin of employees that have access to secret documents.