economic bubble

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Group Member • Archana Kore 26 • Shanmuk Kore 27 • Trupti Kuchekar 28 • Manish Lipcha29 • Reshma Mande 30

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Page 1: Economic bubble

Group Member

• Archana Kore 26

• Shanmuk Kore 27

• Trupti Kuchekar 28

• Manish Lipcha 29

• Reshma Mande 30

Page 2: Economic bubble

Economy Bubble

Page 3: Economic bubble

What is Economic Bubble

• Sometimes referred to as a speculative bubble

• It could also be described as a trade in products or assets with inflated values.

Page 4: Economic bubble

Origin of term

• “Bubble", in reference to financial crises

• Originated in the 1711–1720 British South Sea Bubble

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Impact

• Economic bubbles are generally considered to have a negative impact on the economy

• Political economist Robert E. Wright argues that bubbles can be identified ex ante with high confidence.

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Effect upon spending• Market participants with overvalued assets

tend to spend more because they "feel" richer (the wealth effect)

• But When the bubble inevitably bursts, those who hold on to these overvalued assets usually experience a feeling of reduced wealth

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Possible causes• Bubbles occur when prices for a particular

item rise far above the item's real value

• Some experts think that bubbles are related to inflation and therefore believe that the factors which cause inflation could also be the same factors that cause bubbles to occur.

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10 Most Bizarre Economic Bubbles

in History

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1. Uranium Bubble

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2. Dot-com Bubble

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3. Poseidon Bubble

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4. Florida Land Boom

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5. Mississippi Bubble

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6. Romanian Property Bubble

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7. Railway Mania

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8. Rhodium Bubble

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9. South Sea Bubble

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10. Tulip Mania

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How can economic bubbles be prevented?

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Can Bubbles Benefit the Economy?

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