1. Group Member
• Archana Kore 26
• Shanmuk Kore 27
• Trupti Kuchekar 28
• Manish Lipcha 29
• Reshma Mande 30
2.
3. 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.
4. Origin of term
• “Bubble", in reference to financial crises
• Originated in the 1711–1720 British South Sea
Bubble
5. 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.
6. 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
7. 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.
