Rethinking Asset Bubbles: Reflections for the Age of Institutional Investing

2017 ◽  
Author(s):  
Brad Jones
Keyword(s):  
Asset Bubbles ◽  
Institutional Investing

Inequality and Risky Asset Bubbles

2016 ◽  
Author(s):  
Julien Bengui ◽  
Toan Phan
Keyword(s):  
Risky Asset ◽  
Asset Bubbles

scholarly journals Financial Contagion: A Tale of Three Bubbles

2021 ◽  
Vol 14 (5) ◽  
pp. 229
Author(s):  
Nathan Burks ◽  
Adetokunbo Fadahunsi ◽  
Ann Marie Hibbert
Keyword(s):  
Spillover Effects ◽  
Financial Contagion ◽  
Housing Crisis ◽  
Market Anomalies ◽  
Volatility Clustering ◽  
Asset Bubbles ◽  
Potential Benefits ◽  
Chinese Markets ◽  
Composite Indexes ◽  
Robust Evidence

The primary purpose of the study is to identify and measure the properties of asset bubbles, volatility clustering, and financial contagion during three recent financial market anomalies that originated in the U.S. and Chinese markets. In particular, we focus on the 2000 DotCom Bubble, the 2008 Housing Crisis, and the 2015 Chinese Bubble. We employ three main empirical methods; the LPPL model to identify asset bubbles, the DCC-GARCH model to measure volatility clustering, and the Diebold-Yilmaz volatility spillover index to measure the level of financial contagion. We provide robust evidence that during the DotCom bubble there was very limited spillover between the S&P 500, the Shanghai, and the Shenzhen Composite Indexes. However, there was significantly more spillover effects in the two more recent crises, i.e., the Housing crisis and the 2015 Chinese Bubble. Together, these results highlight the fact that as financial markets have become more globalized, there are greater levels of volatility transmission and correspondingly fewer potential benefits from international diversification.

The Rise of the Super-Rich

2012 ◽  
Vol 77 (5) ◽  
pp. 679-699 ◽  
Author(s):  
Thomas W. Volscho ◽  
Nathan J. Kelly
Keyword(s):  
Trade Openness ◽  
The United States ◽  
Single Equation ◽  
Economic Factors ◽  
Tax Rates ◽  
Real Estate Markets ◽  
Asset Bubbles ◽  
Equation Error ◽  
Short Run ◽  
Income Concentration

The income share of the super-rich in the United States has grown rapidly since the early 1980s after a period of postwar stability. What factors drove this change? In this study, we investigate the institutional, policy, and economic shifts that may explain rising income concentration. We use single-equation error correction models to estimate the long- and short-run effects of politics, policy, and economic factors on pretax top income shares between 1949 and 2008. We find that the rise of the super-rich is the result of rightward-shifts in Congress, the decline of labor unions, lower tax rates on high incomes, increased trade openness, and asset bubbles in stock and real estate markets.

scholarly journals International Real Estate Review

2010 ◽  
Vol 13 (2) ◽  
pp. 218-237
Author(s):  
Susan Wachter ◽  
Keyword(s):  
World War Ii ◽  
Real Estate ◽  
Interest Rates ◽  
Economic Cycles ◽  
Asset Bubbles ◽  
The Great Recession ◽  
The Great Depression ◽  
Data Points ◽  
Short And Long Term ◽  
The Right

The present period of financial instability is also likely to become known as the end of an era; an era of economic calm and policy consensus on ways to maintain market stability. After World War II, the federal government operated on the Keynesian principles that the right mix of spending, regulation, and interest rates could tame economic cycles and eliminate surges of unemployment. In this period, now known as the Great Moderation, we assumed that we knew how to prevent economic crises, such as the recurrence of the Great Depression. However, it is clear that those principles were erroneous as the economy has entered a lesser, but still severe downturn; the Great Recession. This paper looks at the sources of the ongoing economic crisis and points to the unique role in its origins of real estate asset bubbles and mispriced credit, not only in the origin of this crisis, but of many financial crises. An analysis of the data points to the role of mispriced mortgage backed securities (MBS) in the spread of aggressive mortgage products and the unwarranted price speculation that resulted in massive foreclosures. In turn, the paper addresses the source of mispriced risk in MBS as incomplete markets in real estate and non-tradability of MBS and related securities, which ultimately led to the collapse of financial system, threatening global economic health. The paper also suggests corrective measures that can and should be taken to assist the short and long term recovery.

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