Volatility in the prices of assets such as corporate equity or land is pervasive in market economies. Such volatility has been especially pronounced in Japan in the last decade, and in the post-''bubble" period the economy has stagnated. This research will investigate the causes and consequences of the volatility, with the aim of deducing implications for policy. The analysis will be framed by comparisons with the United States and Scandinavian economies. Overall, asset price volatility in the U.S. has been less pronounced in the last decade. But such volatility in some Scandinavian markets has been as marked as in Japan, and collapsing asset prices also introduced a period of recession, diminished business investment and fragility in the banking sector. A comparative analysis therefore seems likely to illuminate the connection between economic fundamentals and the level of asset prices, between asset prices and real economic decisions, and on the potential and limitations of economic policy.