What is it about?
The 2007-9 Great Recession was associated with multiple bubbles in housing markets, stock markets, and bond markets. Indeed, bubbles are becoming frequent and dangerous. Conventional economics is loathe to admit that bubbles exist. But people, using commonsense lay intelligence, can sense bubble phenomena happening around them. In this paper, we present a simple typology of bubbles, and the processes that lead up to bubbles.
Featured Image
Why is it important?
More frequent, more intense and more dangerous bubbles threaten people's savings, work lives, and retirement years. Bubbles are too important and dangerous to be left only to 'experts' in economics. Multidisciplinary approaches that blend economics, sociology, political science, cultural theory and more are needed. This paper makes a start, and we followed it up with the book "Toward a Metatheory of Bubbles". We are continuing to work with such multidisciplinary approaches to probe bubbles.
Perspectives
After this article and a subsequent book-length treatment of the topic, Romeo Turcan and I have come to realize that the phenomena of runaway sentiments shaping major collective behaviors (often with massively adverse outcomes) are very prevalent -- through history and now. We are therefore continuing to explore various facets of such phenomena. "Runaway sentiments" occur in contexts other than bubbles also, and hence need broader research attention.
Dr Nikhilesh Dholakia
University of Rhode Island
Read the Original
This page is a summary of: Bubbles: towards a typology, foresight, April 2013, Emerald,
DOI: 10.1108/14636681311321095.
You can read the full text:
Resources
TBRP at Aalborg University
This research programme at Aalborg University is the main platform where Nikhilesh Dholakia and Romeo V. Turcan are continuing their multidisciplinary studies of bubble phenomena.
Book on Metatheory of Economic Bubbles
This book is part of the ongoing multidisciplinary work by Nikhilesh Dholakia and Romeo V. Turcan on asset bubbles.
Bubble Troubles ... through history
Profiles of five bubbles, from 17th to the 20th century.
Nobel Laureate Robert Shiller on Bubbles Phenomena: Video Interview
On the spectrum of mainstream economists, Robert Shiller is somewhat unique in arguing forcefully that bubble processes exist and are deleterious to economic and social well being.
Nobel Laureate Robert Shiller on Bubbles Phenomena: Some data
On the spectrum of mainstream economists, Robert Shiller is somewhat unique in arguing forcefully that bubble processes exist and are deleterious to economic and social wellbeing.
Nobel Laureate Robert Shiller on Bubbles Phenomena: Warning in 2014
On the spectrum of mainstream economists, Robert Shiller is somewhat unique in arguing forcefully that bubble processes exist and are deleterious to economic and social wellbeing.
Nobel Laureate Robert Shiller on Bubbles Phenomena: Bubble-proneness increasing
On the spectrum of mainstream economists, Robert Shiller is somewhat unique in arguing forcefully that bubble processes exist and are deleterious to economic and social wellbeing.
Nobel Laureate Robert Shiller on Bubbles Phenomena: CAPE warning light flashing in 2014
On the spectrum of mainstream economists, Robert Shiller is somewhat unique in arguing forcefully that bubble processes exist and are deleterious to economic and social wellbeing.
Leo Panitch: Seeking Systemic Alternatives to Casino Capitalism
Coauthor Nikhilesh Dholakia, of this article and the Dholakia/Turcan book on bubbles, sides with the position that the factors leading to devastating asset bubbles are systemic. Insights from sites such as these are essential for understanding the systemic nature of capitalist bubbles.
About Turn on Efficient Markets
Nobel-laureate Eugene Fama does not believe in economic and asset bubbles - markets are efficient and there is no room for irrational exuberance. Fama's doctoral student Cliff Asness started with this same view, but as a practicing fund manager, Asness has come to see the light. Asness now believes that markets do turn irrational and exuberant from time to time, and bubbles do form.
Yes, Virginia, there are Bubble processes...
Cliff Asness did his doctoral work under Eugene Fama, the efficient markets guru and the biggest skeptic about bubbles. Now, as a major funds manager, Asness has come to appreciate how financial markets really work, and has observed the processes that foment bubbles. Markets are not efficient... they are often shaped by runaway sentiments.
Dotcom Crash: Will 2015 be a replay of 2000?
The so-called “dotcom crash” of 2000, when technology and especially e-commerce company stock price valuations plunged in a precipitate fashion, continues to fascinate scholars, practitioners, investors, and market analysts.
Dotcom Crash: Historical Account
The so-called “dotcom crash” of 2000, when technology and especially e-commerce company stock price valuations plunged in a precipitate fashion, continues to fascinate scholars, practitioners, investors, and market analysts.
New Tech Bubble?
This athlete-entrepreneur sees a very dangerous Tech Bubble in 2015, worse than the Dotcom Bubble of 2000... but many other analysts find 2015 and 2000 situations to be completely different.
Rhetoric around US student debt bubble
Some observers are analyzing the massive rise in student debt in USA as a "bubble phenomenon". This article looks at the rhetoric surrounding this issue, and impacts on students, universities and society.
Feranando Rugitsky: Exploring financialization, housing bubbles and the Great Recession
The Great Recession was caused-accompanied by a US Housing Bubble - here is an analysis.
Euphoria circa 2001: A paper worth revisiting
Predating the Great Recession and Housing Bubble, this paper looks at the bubble processes, euphoria, and runaway sentiments of the waning years of 20th century.
Bubbles, Runaway Sentiments: How do you build good theories?
This special doctoral course at TBRP, University of Denmark (the program that provided partial support for the Nikhilesh Dholakia and Romeo Turcan work on bubbles) will help those wanting to learn about good theory building strategies and tools.
Bond-driven Crash? Professor Shiller equivocates
Nobel laureate Robert Shiller is not quite sure... but ... is... umm... reasonably confident... well... sort of... that the next crash (stocks, housing prices) may not ... umm... yeah.. may not...be driven by the bond market.
Stiglitz: The Price of Inequality
Within the first chapter, Stiglitz describes the immense pain and privation caused by the 2007-2008 bubble burst in USA.
Eugene Fama: Ain't no such thing as "bubbles"
Nobel laureate Eugene Fama believes that markets are informationally efficient and bubbles don't -- indeed they CANNOT -- exist...!!
Bubble Trouble: Shanghai stock exchange in April 2015
Massive speculative stock bets, with borrowed cash.
Bubble Trouble: USA in April 2015
From nobel laureates to vulture investors, bubble alarms ringing in Spring-2015.
Jesse Colombo of Forbes on Bubble Trouble: April 2015
A leading media watcher of bubbles ... warns in early April 2015.
Bubble Trouble: Human factors, mere market forces, or God/Satan?
Michael Lewis, for well over a decade, has emphasized the role of human actors in bubble processes.
Resource File on Bubbles - 1
This document contains web links to relevant columns, news items, articles, data, etc. on Bubbles. The collection represents this researcher's personal interests, but should be of value to other researchers interested in Bubbles.
Real Bubbles are a rarity: Columnist
The column presents a chart to show that very large rise-fall in stock prices -- in other words real bubble-inflation and real bubble-burst -- are rare occurrences.
History of FOMO?
This piece argues that the FOMO (Fear Of Missing Out) meme, which seems to play a role in tech-valuation bubbles, originated from this MBA student at Harvard in 2003-3.
ImpactStory Page: Nikhilesh Dholakia
Research portal providing multi-angle view of this author's research portfolio.
Bubble Burst 2016?
This contrarian financial analyst sees a bubble burst approaching in mid-2016.
Bubble Burst 2016? Trump & Cruz
Republican presidential candidates foresaw a 'bubble burst' in 2016.
Bubble Burst 2016? Paul Farrell
This columnist says not just a burst, but a crash of the Great Depression proportions, is coming...!!!
Worse than dotcom bubble?
The stock bubble of #2017 could be worse than the #dotcom #bubble and #crash of #2000, according to this column.
Contributors
The following have contributed to this page
