Professor Vernon Smith and Visiting Research Associate Steven Gjerstad published an op-ed in the Wall Street Journal entitled, “From Bubble to Depression?” The article discusses effects of the collapse of the housing-bubble on the economy. Smith and Gjerstad write, “Why does one crash cause minimal damage to the financial system, so that the economy can pick itself up quickly, while another crash leaves a devastated financial sector in the wreckage? The hypothesis we propose is that a financial crisis that originates in consumer debt, especially consumer debt concentrated at the low end of the wealth and income distribution, can be transmitted quickly and forcefully into the financial system. It appears that we’re witnessing the second great consumer debt crash, the end of a massive consumption binge.” Read op-ed…