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Speculative Bubbles - Appearance And Growth

Author

Listed:
  • BAKO Elena Dana

    (Babes-Bolyai University)

  • SECHEL Ioana - Cristina

    (Babes-Bolyai University)

Abstract

The global financial market is constantly changing, and this is why research topics in this area are endless. The purpose of this article is to highlight the premises of appearance and expansion of speculative bubbles from the perspective of large volumes of financial transactions done far from the fair price. Many researchers believe that stock market indexes through their evolution over time have the ability to anticipate crises or the moments when the speculative bubbles appear. In this article we show that this is not always true, and we state that every time stock market indexes will be adjusted to the real economy.

Suggested Citation

  • BAKO Elena Dana & SECHEL Ioana - Cristina, 2013. "Speculative Bubbles - Appearance And Growth," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 65(3), pages 182-191.
    • Handle: RePEc:blg:reveco:v:65:y:2013:i:3:p:182-191
    as

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    File URL: http://economice.ulbsibiu.ro/revista.economica/archive/65315bako&sechel.pdf
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    References listed on IDEAS

    as
    1. Harrison Hong & José Scheinkman & Wei Xiong, 2006. "Asset Float and Speculative Bubbles," Journal of Finance, American Finance Association, vol. 61(3), pages 1073-1117, June.
    2. Chris Brooks & Apostolos Katsaris, 2003. "Rational Speculative Bubbles: An Empirical Investigation of the London Stock Exchange," Bulletin of Economic Research, Wiley Blackwell, vol. 55(4), pages 319-346, October.
    3. Jose A. Scheinkman & Wei Xiong, 2003. "Overconfidence and Speculative Bubbles," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1183-1219, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Speculative Bubble; Stock Exchange Markets; Stock Market Indexes.;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises

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