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 items 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.