The US NASDAQ bubbles and policies analysis

Building on earlier qualitative analyses of historical crises, we employ a logistic model to empirically analyze how monetary, fiscal, and sector-specific incentives contributed to the NASDAQ Composite Index (IXIC) bubbles, thereby integrating quantitative methods with prior theoretical work. It diverges from analyzing banks’ roles in economic crisis by 2022 Nobel Laureate Ben Bernanke et al, but multi-asset bubbles. It expands the rational hypothesis theories by examining the effects of loose monetary and fiscal policies, as well as tech-friendly policies. The results reveal the coexistence of the rational and irrational bubbles rather than mutual exclusion. Despite the complex collinearity issues and significant differences between the results of the Monto Carlo and wild bootstrap methods, factors such as M1 and VIX and changes in the Federal funds rate have been identified as contributors to the IXIC bubbles. Technological advancements represented by FAANG (Facebook, Amazon, Apple, Netflix, and Google/Alphabet) and favorable policies have also spurred speculative sentiment in IXIC, as evidenced by historical events. However, the model did not accept the number of patent applications as an indicator of technological innovation. The paper further explores the dynamics of multi-asset bubbles, single-asset recurrent bubbles, high inflation, and elevated public debt, suggesting that economic instability—both within the US and globally—may persist beyond initial projections made in 2022.