The dangerous history of bubbles #economics

 
KAL, The Economist’s resident cartoonist and animator, explains the dangerous history of bubbles.

KAL draws: Bubbles: Fit to burst

 

 
Economic bubble
An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is “trade in high volumes at prices that are considerably at variance with intrinsic values. It could also be described as a a situation in which asset prices appear to be based on implausible or inconsistent views about the future
https://en.wikipedia.org/wiki/Economic_bubble

Bubbles are common in other asset markets such as for stocks and bonds.

The bursting of a bubble – such as a collapse in property prices – can have important demand-side effects on wealth, confidence and aggregate demand.

 
 
 

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About benvitalis

math grad - Interest: Number theory
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