What marks the bursting of an economic bubble When a bubble bursts, what happens first

The economic bubble is getting bigger and bigger, especially in the real estate sector, and the phenomenon of high housing prices may have entered the era of bubble economy. China's house-price-to-income ratio is three to six times that of developed countries, and first-tier cities such as Beijing and Shanghai have less than one-tenth the per capita income of Tokyo, but housing prices are already on par with Tokyo, and in some areas the house-price-to-income ratio is more than 30 times. "Housing prices in Beijing and Shanghai have been overdrawn in the next 10 years", the risk of a bubble in China's real estate is already very large, if housing prices in first-tier cities continue to soar, it will likely replicate the situation of "sharp rise and fall in Tokyo's property market", once the bubble bursts, it will have disastrous consequences for a Chinese society that is not rich as a whole.

Such a prediction may be a bit alarmist, but the performance of the real estate sector beyond the economic fundamentals really reflects the reality that China's economy is unbalanced to a certain extent, and the deeper reason lies in the monopoly of local fiscal and tax structures and vested interest groups. The real estate market, the increase in land revenue, coupled with the decline in tax revenue in the real economy, have made the local government more dependent on land finance. Therefore, the decision-making level has finally unified its understanding that housing price regulation cannot just curb speculation, that is, it is necessary to resolutely and thoroughly beat down housing prices, and not give the market any expectations of housing prices.

Otherwise, more and more people will drown in the bubble. The sooner housing prices are lowered, the more ordinary people can be saved, and the more social contradictions will be eased. Otherwise, it will be out of control.

The so-called economic bubble refers to the part of the asset market ** that detached the asset from its intrinsic value due to local speculative demand (false demand). It is essentially an asset ** inflation that deviates from the basic conditions of the economy. From the definition of bubble in the economic dictionary, it can be seen that **** (that is, the sign of an economic bubble) is the inevitable result of the bursting of the bubble and will lead to a financial crisis.

Taking the real estate bubble as an example, the earliest verifiable real estate bubble is the Florida real estate bubble that occurred from 1923 to 1926, which triggered the collapse of Wall Street and led to the global economic crisis in the 30s of the 20th century led by the United States, and finally led to the outbreak of World War II. From the 70s of the 20th century to the early 90s, Japan's land price bubble is the longest real estate bubble in history, from the bursting of the land price bubble in 1991 to the present, the Japanese economy has never come out of the shadow of depression, and is even compared to another "defeat" of Japan after World War II.

If the economic bubble bursts, its most striking sign is that all prices will return to rationality and will no longer be inflated. At the time of the breakdown, the economic data plummeted, and the market was dark, with no lights in sight and no moonlight and stars. Many factories have closed their doors, many workers have been laid off and unemployed, the wallets of the rich have shrunk severely, and the lives of the poor have become even more difficult after they have been laid off.

In the early years, a big meal of 100 yuan was rushed, and now the fast food box lunch of 3 yuan a meal cannot be sold. Earlier banks lined up to deposit money, but now banks are crowded. I bought a house and a car earlier, and now I buy a banana fan to enjoy the breeze.

I used to drive for a ride, but now I walk lazily. Earlier, he smiled and his mood was written on his face, but now he wants to scold his mother, but he doesn't know who to scold. After the bursting of the economic bubble, the economic order was basically reshuffled, and everything started from scratch.

After ten or twenty years, the bubble accumulates again, and after 30 years, it bursts again. This has been the case in capitalist countries for 300 years.

The most obvious sign of the bursting of an economic bubble when an economic crisis comes. First of all, prices are soaring and currencies are appreciating.

The bursting of the economic bubble first affects the people, housing prices fall, prices fall, although it seems that the cost of living has fallen, but some chain reactions will also come one after another, such as the decline in housing prices, people take out loans to buy houses will bring catastrophic destruction, and often the decline in prices is only a precursor, and the follow-up will also usher in a trend of soaring prices.

Trouble, thanks!

Economic bubbles. It refers to a series of expansions of assets, that is, in the process of increasing the size of the market, the market far exceeds its actual value, forming a false prosperity and containing too much "bubble" economic aggregate. The total amount of state-owned assets of a country can generally be divided into tangible assets (including land) and financial assets.

In today's asset market, the most traded listed assets are concentrated in ** and real estate, so asset ** inflation is particularly pronounced in ** and real estate. There are two main reasons for the bubble: speculation has become a trend, pushing up assets**; The return on asset valuation is too high and abnormal.

China's valuations are so high that the market** of assets is far from the real value of the economy, which is the true basis of the economy.

It is worth noting that in 2006-07, **substantially**, real estate** remained high. It's a huge bubble. This led to the crisis of 2008.

The formation of bubbles requires a certain amount of dependency, and economic bubbles are no exception. They also require attachments, academically called carriers. To sum up, the market mechanism can be seen.

No matter how it runs, there is a possibility of economic bubbles. Speaking of the bubble economy.

I believe that many people are not very familiar with it, but it is a phenomenon that we often see, involving countries and even the global economy.

development. If a country's economic development does not conform to the laws of the market, then no matter how prosperous it is, it will eventually create a bubble economy.

A bubble economy refers to a false boom characterized by an abnormal asset (real estate), i.e., a large number of events in a continuous process that makes the market far exceed its actual value. In short, the bubble economy refers to the excessive growth of virtual capital. The bubble economy has its pros and cons.

On the one hand, it is conducive to the concentration of capital and promotes active competition and prosperity in the economy. On the other hand, there is a speculative factor, which can easily lead to excessive volatility of assets**, causing market chaos and social unrest. In fact, there are two reasons for the formation of the bubble economy:

First, the macro environment is loose and there is speculative capital**; In addition, there is a lack of restraint mechanism for the formation and development of the bubble economy.

China's capital markets.

The bubbles are mainly concentrated in the Growth Enterprise Market and the SME Board.

The myth of wealth creationThe gem on the SME board has a huge motivating effect on entrepreneurs. In the current difficult economic situation, the national level encourages "mass entrepreneurship and innovation", which may welcome a certain degree of bubble in the capital market. Another benefit of a bubble is that it encourages businesses to raise funds directly, reducing their reliance on indirect financing from banks.

A bubble means that it is cheaper to raise capital directly through the issuance of new shares, and the company can use less share capital.

Normally, people use the bubble economy as a synonym for false prosperity, and once the bubble bursts, the prosperity disappears completely. Economic bubble refers to the imbalance that often occurs in the process of economic development, and the specific manifestation of these imbalances is the ups and downs of the economic cycle, just like a mountain stream, the water flow is fast, it is inevitable to stir up some bubbles, but it cannot be judged that the water quality of the creek has changed. The foam in the stream is completely different from the foam blown by soapy water, and because the causes of the two are different, the harm caused is different, and the countermeasures to solve the problem are also different.

It is a term in economics, which refers to a series of assets that suddenly **expand, continuously and sharply** over a period of time, exceeding the value actually represented, if the economic bubble bursts, the effect is that these things will depreciate rapidly, and then they will lose money.

An economic bubble is a false boom in the economy. After the bursting of the economic bubble, it will have a great impact, affecting people's income levels, as well as social progress and development, and there may be an economic crisis.

The meaning of this word is that the economic structure has been adjusted, and then it will also cause particularly serious factors to the economy, and then the economy will also have a large loss, and the economy will also be sluggish, which will lead to a decline in the price level, and will also lead to a particularly serious loss of investors, and will also lead to a complete collapse of the market.

A financial bubble refers to an economic phenomenon in which the market is greater than the actual price of a financial asset or a series of financial assets after experiencing a continuous price increase. The financial bubble is an illusion of improper macroeconomic regulation and control of the economy, excessive investment causing excessive expansion of assets, blind pursuit of economic growth, and rapid expansion of domestic investment, leading to false prosperity. When the financial bubble begins to burst, the main characteristics are that people's consumption is high, prices are rising, and people spend money when they have it, and they do not save or save very little.

Financial bubbles are often formed because of economic overheating, and bubbles are reflected in real estate, credit, etc. The collapse is because the asset ** deviates from the value excessively, and even investors no longer dare to continue to invest, and they sell one after another, thus forming a chain effect.

Economic bubbles. It is not the same as the bubble economy.

The difference in parts of speech, economic bubble itself is a neutral word, while bubble economy is a derogatory term. Economic bubble is inevitable and an objective economic phenomenon, but bubble economy can be a subjective and artificial result.

Taking the huge fluctuations in housing prices in the past few decades as an example, due to the significant progress of urban construction, the demand for urban building construction has increased, so the real estate economy has flourished, and then there has been a phenomenon of house speculation, which makes the value of the house overflow its own value, so this part of the overflow value is called an economic bubble.

Looking at this problem from another angle, we know that this kind of property speculation will bring bad results, and even cause a huge economic crisis.

It is also necessary to support regional economic development, and the property speculation at this time has become a bubble economy.

The economic bubble itself has a certain objective existence, and the excessive expansion of the economic bubble will form a bubble economy, so in the development stage, the bubble economy and the economic bubble do not belong to the same category.

Or take the grass house as an example, the people who speculate will inevitably exist, but the speculation within a certain range will not form a bubble economy, if the behavior of speculation is not curbed, the final development result will become a bubble economy, and at this time the bubble economy is separated from the physical capital demand, which will produce huge harm, the reason is very simple, this value is virtual, if one day everyone's cognition tells themselves that the speculation will not make money, then the bubble economy will collapse, The resulting ripple effect is likely to be a collapse-like consequence.

To sum up, economic bubbles and bubble economies are different, different in terms of development stages, and at the same time have their own separate meanings. But in general, both the economic bubble and the bubble economy should be taken seriously, both of which have the meaning of false prosperity, and once the bubble bursts, it will lead to a serious economic collapse.

Economic bubble and bubble economy are two different concepts, the former reflects a "local" economic phenomenon; The latter reflects the "big" economic phenomenon

The meaning of these two is different, economic bubble mainly refers to the expansion and bubble of assets, and economy refers to virtual assets.

Economic bubble refers to the excessive increase of fictitious capital, and bubble economy refers to a kind of financial speculation.

1. Bubble economy: refers to the macroeconomic state in which the value of assets exceeds that of the real economy and it is easy to lose the ability to sustain development. Bubble economies are often propped up by a lot of speculation and are essentially greedy.

Due to the lack of support from the real economy, its assets are as easy to burst as bubbles, so it is called a "bubble economy" in economics.

2. Bubble bursting: When the bubble economy develops to a certain extent, it often leads to the rapid development of asset value due to the bursting of market expectations or myths that support speculative activities, which is called bubble bursting in economics.

3. Example: The Japanese bubble economy is a Japanese economic phenomenon that emerged in Japan from the late 1980s to the early 90s. The length of this period varies according to different economic indicators, but generally refers to a period of four years and three months between December 1986 and February 1991.

This was Japan's second post-war period of great economic growth, after the rapid economic growth of the late 60s.

This economic wave was supported by a lot of speculation, so with the bursting of the bubble in the early 90s, the Japanese economy experienced a major recession, and then entered the Heisei Great Depression.

In terms of consequences, the Japanese real estate bubble that burst in the 90s of the 20th century was the longest in history. The bubble not only hit the real estate sector hard, but also directly triggered a serious fiscal crisis. As a result, Japan ushered in the longest economic recession in history, falling into a 15-year depression and slump.

Even in 2012, Japan's economy had not fully recovered from the shadows. It is no wonder that the real estate bubble is often referred to as "another defeat of Japan after World War II" and the 90s of the 20th century as Japan's "lost decade".