Questions tagged [economic-bubble]

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18 votes
3 answers

Why did banks give out subprime mortgages leading up to the 2007 financial crisis to begin with?

I've been reading a couple of books on economics out of curiosity and it got me thinking about the 2007 financial crisis. Hindsight is always 20/20, but if you've ever worked with lower income people ...
Grant Curell's user avatar
0 votes
1 answer

In the context of Blanchard and Watson (1982), what is the difference between the bubble component, bubbles and bubble?

Why are they consistently switching between plural and singular and also, what is the difference between these and the bubble component? A serious question. Below is the paper by Blanchard and Watson (...
EHMJ's user avatar
  • 157
1 vote
0 answers

Shareholder oppression, venture "growth at all costs", and bubbles

Are "lifestyle businesses" more substantially likely to remain closely held corporations and commit shareholder oppression (business judgment rule)? If so, does this have a substantial ...
llllvvuu's user avatar
  • 159
1 vote
1 answer

Was the financial crash of 2008 caused by top graduates of the American Ivy Leagues working at wall street banks?

From this article by Lisandro 'Leloy' Claudio, a Philippine/a Filipino professor of history, politics, South & Southeast Asian Studies (and not necessarily of finance, economics, mathematics or ...
BCLC's user avatar
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1 vote
2 answers

Why would China's housing be in a bubble?

This popular video on YouTube, "China's Reckoning: Housing Crisis", suggests that the housing market in China is in a bubble, because the vacancy rate is very high. However, it also ...
MWB's user avatar
  • 511
1 vote
2 answers

Is a financial bubble harmless if rich people choose to hoard their wealth?

The real question is longer than the title suggests. I was reading about Principles For Navigating Big Debt Crisis by Ray Dalio, and he mentioned that an economic bubble happens when too much money ...
David LE's user avatar
2 votes
1 answer

Empirical means of discerning "economy" and "bubble"

In the news lately and in previous administrations, one of the most popular sound bytes I've heard was: "so and so is not growing the economy, he's growing the bubble." As with much sensationalism in ...
Arash Howaida's user avatar
2 votes
2 answers

True or False: During the Japan Bubble, one sky scraper in Tokyo was worth more than the entire state of california?

I have heard a rather outlandish claim that during the peak of the real estate bubble in Japan (I think that was in the 70's and 80's), one sky scraper in Tokyo was worth more than the entire state of ...
Arash Howaida's user avatar
6 votes
3 answers

Are cryptocurrencies a ponzi scheme or a bubble?

Several users in this forum have addressed bitcoin and other cryptocurrencies as ponzi schemes. Bitcoins have several uses which could legitimate its value as a currency, but also have received ...
JoaoBotelho's user avatar
  • 2,145
3 votes
3 answers

What activity or event(s) marks the point at which an economic "bubble" burst?

What general activity or event(s) mark the time at which an economic "bubble" bursts? e.g. the dot-com bubble, etc. Would it be considered to have "burst" when intrinsic value is less than price? ...
GWR's user avatar
  • 131
0 votes
2 answers

Does it affect locals negatively when a new company moves in?

I want to specifically discuss Dallas,TX if possible but a broader answer is still appreciated. Ever since Toyota and State Farm moved to Dallas, among others, the housing prices have sky rocketed to ...
LetTheWritersWrite's user avatar
31 votes
10 answers

A law against selling any house cheaper than it was bought for, what consequences would that have?

I'm looking for a more general and principled answer and use Scandinavia today only as a sketchy example of the kind of scenario I'm asking about. I live in Scandinavia where house prices has had an ...
LocalFluff's user avatar
3 votes
5 answers

Why recent crises all started with a housing bubble?

I was writing some notes about the last economic and financial crisis and I noticed that all these recent crisis start with a housing bubble. Beside the 2007-08 US's one, also Japanese crisis in the ...
PhDing's user avatar
  • 754
4 votes
1 answer

Did a similar property boom take place in another country or throughout history like we have seen in London? If so how did it effect the economy?

The London property market has seen a sharp increase in the average house price. If we go back to the 70's the average UK and average London price were almost the same, however since than the gap has ...
Sharingan's user avatar
  • 141
4 votes
2 answers

because bitcoins do not generate earnings, then (it is a ponzi scheme)?

What does the author mean with: Since Bitcoins do not generate any actual earnings, they must appreciate in value to ensure that people are willing to hold them. Why must they appreciate in ...
Thufir's user avatar
  • 143
1 vote
0 answers

Ultralow interest rates and bubbles

We've had ultralow interest rates for a very long time now (I think unprecedented in history). Is it possible that this extremely loose monetary policy is creating bubbles? Bill Gross has put out a ...
tibo's user avatar
  • 328
-1 votes
1 answer

Housing bubble and financial crisis [closed]

Can anybody explain me easily what is housing bubble and how it cause financial crisis?
opu 웃's user avatar
  • 99
5 votes
1 answer

What is an economic bubble?

How do one know whether an appreciation in the price of an asset is a bubble or not? For example, during the 2007-2008 crisis, there was a housing bubble, which is only mainly agreed upon when the ...
Kun's user avatar
  • 811