Journalists love to root against the art market. They seem to believe that any market that isn’t going straight up must be going straight down. Part of the problem is the competitive nature of journalism where each outlet is in a race to predict an event before it happens. Given the deep-seated mistrust of the art market, it never hurts to shout “crash” early and often.

Maybe that explains the numerous times the art editors have chosen to publish stories about Roman Kraussl’s academic study claiming to have detected statistical tell that the art market has entered a bubble just like the late 1980s. That may be the case. But the lynch pin of the study is the supposed match between the Japanese-driven Impressionist bubble, the period peaking in 2007 and today.

That’s a potential flaw in the study. The authors presume that today’s art market is a different market from 2007. But looking at their own charts, one can see a steady rise from about 1997 to 2015 separated briefly by a short, sharp exogenous shock in 2009. Spread of a greater time period, the rise in prices is not as steep and may not be a bubble indicator.

It may be one too. The point is that it is being reported as a surefire tell when the paper is more ambiguous.

One can argue that these are two, not three, periods which hardly makes for a statistically impressive data set. The authors cite Japan’s credit expansion as an important antecedent to the late 80s bubble. And we’ve seen a huge expansion of global credit over the course of the 21st century. And that would argue for seeing the 2000-2015 art boom as similar to the Impressionist boom of the late 1980s.

Finally, just one other note. The reports on the paper included the chart shown above. The chart itself was not part of the paper. But you can see something interesting there. The green line that rises dramatically in 2006 then falls sharply after 2011 is not an index of art. That’s gold.

Gold was in a bubble, according to this chart. Gold’s bubble has burst. People still buy it. They still trade it and it still has value greater than the the pre-credit crisis level. What does that tell us?

Is There a Bubble in the Art Market?