Group Member

• Archana Kore 26

• Shanmuk Kore 27

• Trupti Kuchekar 28

• Manish Lipcha 29

• Reshma Mande 30
 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.
 Origin of term

• “Bubble", in reference to financial crises

• Originated in the 1711–1720 British South Sea

Bubble
 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.
 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
 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.
1. Uranium Bubble
2. Dot-com Bubble
3. Poseidon Bubble
4. Florida Land Boom
5. Mississippi Bubble
6. Romanian Property Bubble
7. Railway Mania
8. Rhodium Bubble
9. South Sea Bubble
10. Tulip Mania
How can economic bubbles be prevented?
Can Bubbles Benefit the Economy?