Yale economist Robert Shiller believes financial-market bubbles may not be all bad, and that taking manipulative steps to prevent them would defeat the purpose of free markets.

In a Wall Street Journal video interview, he also recalled how he may have planted the term "irrational exuberance" into former Fed Chairman Alan Greenspan's head, with unexpected consequences.

“Profits are an important motivator. So in the long run, it’s hard to say bubbles are really bad,” said Shiller, a Nobel laureate who is famously given credit for predicting both the dot-com stock collapse and the 2008 housing market meltdown.

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“Take the Internet bubble of the 1990s. What that did was it generated a lot of start-ups, some of them foolish. Some of them failed but others survived. So is it a bad thing?”

In Shiller’s view, there may have been no logical choice other than letting the dot-com bubble and housing market bubbles play themselves out.

“What would the alternative be? I’m thinking we would have been better off if we had tamed those bubbles, but I’m not really sure. We certainly don’t want to do Draconian things that would upset the whole system to prevent bubbles”

Shiller told the Journal that when then-Fed Chair Greenspan used the term “irrational exuberance” in a 1996 speech to describe the behavior of financial markets, it came after Shiller had used the term a short while previously during remarks at a Fed meeting and then in a lunch with Greenspan.

He noted the Tokyo stock market immediately plunged on the Greenspan remarks, and then markets fell globally in a ripple effect as they opened for the day.

“I came home and told my wife, I may have started a worldwide stock market crash. She said your ego is getting way out of control. But the markets are that crazy. I had his ear.”

Shiller used the term again as the title of his book, “Irrational Exuberance,” in 2000.

BBC News reported that in the current bull stock market, some experts are now debating whether there may be a new bubble in technology stocks and Internet stocks.

Meanwhile, CNBC speculated there may be a bubble forming in IPO stocks.

And Investor Place suggested a bubble in biotech stocks may already have burst, but that it may be too early to buy the stocks in that sector.

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