What is an economic bubble and what is a bubble economy

The economy boomed rapidly for a while, then fell sharply again, and finally burst like a soap bubble.

Example: In the early 90s of the last century, the debut of ** and crazy trading began to make Chinese people feel that they had caught the reins that could "get rich overnight".

The grand occasion of Shenzhen's issuance of original shares has made those who have experienced it unforgettable. However, after several ups and downs, the Shanghai stock index fell from 6,124 points to 1,624 points, so that some scholars in Europe and the United States even mistakenly regarded China's sharp fall as the source of the global financial turmoil. After 2007, the stock price, which had no power to return to heaven, chilled the hearts of some speculators in the country, and the proportion of financial bubbles in the speculative market became worse and worse.

** After becoming unprofitable, speculators poured money into real estate, which in turn caused the core of China's economy to shift to real estate, forming a real estate bubble.

The part where the market value is higher than the actual value.

It's the same as having your dreams shattered.

The bubble economy is a macroeconomic state in which the value of assets exceeds that of the real economy and is prone to losing the ability to develop sustainably. Speculation often supports the bubble economy, and lacks the support of the real economy, so the assets of the bubble economy are as easy to burst as bubbles, so it is called the "bubble economy" in economics.

Because market expectations support speculation, or because people think that these are bubbles that have grown to a certain extent, resulting in assets **fast**, this is what economics calls bubble bursting.

The bubble economy can be divided into three stages, namely the bubble formation stage, the expansion stage, and the bursting stage.

In general, capital flows should reflect the state of operation of the real capital and industrial sectors. Once finance exists, financial speculation is bound to exist and begin to create bubbles.

The bubble economy usually refers to the large amount of capital in the continuous process of the cherry blossoms, so that its market far exceeds its actual representative value, forming a false prosperity and unsustainable economic state.

Excessive growth of virtual capital.

A bubble economy refers to a macroeconomic situation in which the value of assets exceeds the value of the real economy, and it is easy to lose the ability to sustain development. Bubble economies tend to be supported by a lot of speculative activity, and due to the lack of support from the real economy, their assets tend to burst easily, hence the name bubble economy.

The bubble economy is often accompanied by the ups and downs of commodities, but the bubble economy is not the fluctuation of commodities in the general sense, but refers to the fundamental changes in the value of commodities after excessive concentration of social capital and excessive speculation caused by repeated sales of the same commodity.

Bubble economy is the name of an economic phenomenon, which refers to an economic phenomenon in which a series of assets soar in a continuous process under the continuous impetus of price increase expectations, but once the surge reaches the upper limit, the expectation will be reversed, resulting in a financial crisis. <>

To put it bluntly, it is a group of greedy businessmen who carry out a lot of speculative activities to support the behavior of asset value beyond the real economy, but lack the support of the real economy.

So is there any harm in the bubble economy? The answer, of course, is yes

First, the bubble economy is prone to cause panic among the people and cause anxiety about the future. At present, because the state will intervene in the development of the economy at the necessary time, the occurrence of bubble economy will be relatively rare, but once the bubble economy appears, the impact on society and the country is very large. First of all, it will make people feel anxious and uneasy, and it is easy to cause people to panic about the economic crisis and fear that it will affect their current lives.

Second, the bubble economy will drive the sharp rise of assets, which will lead to an increase in the price level and cause inflation; Once there is a bubble economy, it indicates that there will be an economic crisis to a large extent, resulting in a general rise in prices, and inflation may occur under the condition that people's income remains unchanged, which will seriously affect people's living standards and economic losses.

For example, the current housing price bubble, because of excessive development, coupled with many people's malicious speculation, has caused the current housing prices to be generally inflated, once the housing prices reach a peak, there will definitely be a collapse, triggering a housing price crisis, that is, a bubble economy. <>

In general, the bubble economy is a bad economic phenomenon, which will bring a crisis to the economy, seriously hinder the development of society, and reduce the quality of life of the people.

The bubble economy, like bubbles, is relatively illusory, not "strong" enough, and easy to burst.

On the surface, it seems that the economy is developing at a very fast speed, but there is no supporting industry, which is particularly easy to cause bankruptcy or ****, which is the bubble economy.

It mainly refers to an economic system in which the asset economy exceeds the real economy and is very easy to lose the ability to sustain development.