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Economic bubble information


An economic bubble (also called a speculative bubble or a financial bubble) is a period when current asset prices greatly exceed their intrinsic valuation, being the valuation that the underlying long-term fundamentals justify. Bubbles can be caused by overly optimistic projections about the scale and sustainability of growth (e.g. dot-com bubble), and/or by the belief that intrinsic valuation is no longer relevant when making an investment (e.g. Tulip mania). They have appeared in most asset classes, including equities (e.g. Roaring Twenties), commodities (e.g. Uranium bubble), real estate (e.g. 2000s US housing bubble), and even esoteric assets (e.g. Cryptocurrency bubble). Bubbles usually form as a result of either excess liquidity in markets, and/or changed investor psychology. Large multi-asset bubbles (e.g. 1980s Japanese asset bubble and the 2020–21 Everything bubble), are attributed to central banking liquidity (e.g. overuse of the Fed put).

In the early stages of a bubble, many investors do not recognise the bubble for what it is. People notice the prices are going up and often think it is justified. Therefore bubbles are often conclusively identified only in retrospect, after the bubble has already popped and prices have crashed.

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Economic bubble

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crisis at the start of the Thirty Years' War Tulip mania (1637) an economic bubble that burst, hurting the economy of the Dutch Republic The General Crisis...

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Ponzi scheme

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This typically does not happen in the case of an economic bubble, especially if nobody can prove the bubble was caused by anyone acting in bad faith, moreover...

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2000s United States housing bubble

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The 2000s United States housing bubble or house price boom or 2000s housing cycle was a sharp run up and subsequent collapse of house asset prices affecting...

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Cryptocurrency bubble

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Bubble

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Housing bubble

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A housing bubble (or a housing price bubble) is one of several types of asset price bubbles which periodically occur in the market. The basic concept...

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Tulip mania

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speculative bubble or asset bubble in history. In many ways, the tulip mania was more of a then-unknown socio-economic phenomenon than a significant economic crisis...

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Bitcoin

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seen as an investment and has been described by many scholars as an economic bubble. As bitcoin is pseudonymous, its use by criminals has attracted the...

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Stock market bubble

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A stock market bubble is a type of economic bubble taking place in stock markets when market participants drive stock prices above their value in relation...

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Everything bubble

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even in non-crisis periods, to create economic growth through asset price inflation. The term "everything bubble" first came in use during the chair of...

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Financial crisis

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failure and forces a devaluation. A speculative bubble (also called a financial bubble or an economic bubble) exists in the event of large, sustained overpricing...

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Recession

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external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale anthropogenic or natural disaster (e.g. a pandemic)...

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Wall Street Crash of 1929

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rise further. Speculation thus fueled further rises and created an economic bubble. Because of margin buying, investors stood to lose large sums of money...

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Australian property bubble

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The Australian property bubble is the economic theory that the Australian property market has become or is becoming significantly overpriced and due for...

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South Sea Company

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price. The notorious economic bubble thus created, which ruined thousands of investors, became known as the South Sea Bubble. The Bubble Act 1720 (6 Geo....

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Extraordinary Popular Delusions and the Madness of Crowds

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Bubble. In the 21st century, the mathematician Andrew Odlyzko pointed out, in a published lecture, that Mackay himself played a role in this economic...

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Mississippi Company

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detached from economic reality, the Mississippi bubble became one of the earliest examples of an economic bubble. In France, the wealth of Louisiana was exaggerated...

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Speculation

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with economic bubbles. A bubble occurs when the price for an asset exceeds its intrinsic value by a significant margin, although not all bubbles occur...

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Stock market crash

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underlying economic factors. They often follow speculation and economic bubbles. A stock market crash is a social phenomenon where external economic events...

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Unicorn bubble

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A unicorn bubble is a theoretical economic bubble that would occur when unicorn startup companies are overvalued by venture capitalists or investors....

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Carbon bubble

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The carbon bubble is a hypothesized bubble in the valuation of companies dependent on fossil-fuel-based energy production, resulting from future decreases...

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Salaryman

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declined, its image has changed over time from mass partying during the economic bubble to conservative consumption at home after the collapse of the economy...

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the economics study of the public sector, economic and social development is the process by which the economic well-being and quality of life of a nation...

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