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The analysis of bubbles and crashes on financial markets for emerging economies: Evidenced From BRICS

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  • Kerim Eser AFÞAR

    (Department of Economics, Dokuz Eylul University, Izmir, Turkey)

  • Zakayo S. KISAVA

    (Graduate School of Social Science, Dokuz Eylul University, Izmir, Turkey.)

Abstract

The study was conducted to analyze the bubbles, and crashes on the financial market in emerging economies; (BRICS) stock prices were employed to detect the existence of the bursting bubble. The Right-tailed Augment Dickey-Fuller Unit Root Test used to complete the study of analyzing bubbles and crashes. The study consists of four primary tests; ADF, RADF, SADF, and GSADF Moreover, the study used the first three criteria. The survey covered the period from 2000 to 2016, to absorb the nuclear currently financial crisis in the BRICS and analyze its impacts. Also, this period coincides with both economic reforms in some countries like China and early indications of an impending US crisis. The findings in all countries rejected the null hypothesis of no bursting bubbles in the stock market in favor of the alternative theory. The findings suggest that such an explosive behavior may be attributable to differences in stock prices of traded goods. The result has economic policy importance and implications on the economy.

Suggested Citation

  • Kerim Eser AFÞAR & Zakayo S. KISAVA, 2018. "The analysis of bubbles and crashes on financial markets for emerging economies: Evidenced From BRICS," Turkish Economic Review, KSP Journals, vol. 5(1), pages 1-11, March.
    • Handle: RePEc:ksp:journ2:v:5:y:2018:i:1:p:1-11
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    References listed on IDEAS

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    More about this item

    Keywords

    BRICS; Emerging economies; Financial bubble and crashes; Right-tailed ADF; Stock price.;
    All these keywords.

    JEL classification:

    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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