Do Stock Price Bubbles Influence Corporate Investment?. PDF Download

Author: Paul Sheeran
Publisher: Routledge
ISBN: 9780815397885
Category :
Languages : en
Pages : 230

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Book Description
Providing a historical appraisal of bubble investments, and blending theory with field observations, this insightful work will benefit academics, researchers and professionals observing the nexus of relationships between speculation, states and markets. The book presents an analysis of the development and decline of investment bubbles and helps develop the models that inform the risk assessment of bubble behaviour. By identifying particular trends and consequences, the book presents insight into the operation of speculative activity and its social, economic and political repercussions.

Author: Simon Gilchrist
Publisher:
ISBN:
Category : Capital investments
Languages : en
Pages : 60

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Book Description
Building on recent developments in behavioral asset pricing, we develop a model in which dispersion of investor beliefs under short-selling constraints drives a firm's stock price above its fundamental value. Managers optimally respond to the stock market bubble by issuing new equity. The bubble reduces the user-cost of capital and increase real investment. Using the variance of analysts' earnings forecasts as a proxy for the dispersion of investor beliefs, we find strong empirical support for the model's key prediction that increases in dispersion cause increases in new equity issuance, Tobin's Q, and real investment.

Author: David Western
Publisher: Routledge
ISBN: 100015906X
Category : Business & Economics
Languages : en
Pages : 262

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Book Description
An extremely user-friendly overview of the inner workings of the US stock market. Things have changed a great deal since the heady days of the 1980s and we are now entering an era of profound uncertainty, with most analysts predicting trouble ahead. Indeed, the alarming decline of the NASDAQ shows no sign of abating and the fear is that traditional industries will be the next to bite the dust. September 11th has only added to the gloomy mood. This book examines the current conditions before looking back to the events of the past century - The Great Depression, the 1970s oil crisis, the party-for-the-rich atmosphere of the 1980s and the emergence of the new economy.

Author: David L. Western
Publisher: Routledge
ISBN: 1134201710
Category : Business & Economics
Languages : en
Pages : 278

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Book Description
Examining the current conditions before looking back to the events of the last century, this volume covers the Great Depression, the 1970s oil crisis, the party-for-the-rich atmosphere of the 1980's and the emergence of the new economy.

Author: György Komáromi
Publisher: ICFAI Books
ISBN: 8131404080
Category : Business enterprises
Languages : en
Pages : 129

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Book Description
This book presents one of the most controversial happenings in economics stock market bubbles. The author discusses this topic threadbare and provides a critical analysis of related literature from different economic schools. This book also presents analy

Author: IntroBooks Team
Publisher: IntroBooks
ISBN:
Category : Business & Economics
Languages : en
Pages :

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Book Description
An element of asset bubble develops when the value of an asset, like real estate, commodities, stocks, or bonds, increases at a brisk rate without intrinsic factors, such as equivalent ever-increasing demand, to validate the spike in prices. An asset bubble is triggered when assets such as gold, stocks, or housing rapidly experience a dramatic price hike over a short period that is not sustained by the value of the commodity. The characteristic of a bubble is unreasonable optimism: a tendency when everyone is buying up a specific asset. When investors rush towards a category of assets, like real estate, it results in a rise in both price and demand. Investors carry on bidding up an asset’s price well beyond sustainable and real value in the course of a bubble. Inevitably, when prices are in a collision, the bubble "bursts, and subsequently, demand disintegrates, and the result is often significantly lowered domestic spending and dismal business and the economy's possible future downturn. Knowing the historical trends and causes of asset bubbles will prevent one from responding and falling prey to a future debacle. Illogical exuberance is a crucial indicator of a continuing asset bubble.

Author:
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Author: G.P. Dwyer
Publisher: Springer Science & Business Media
ISBN: 9401578818
Category : Business & Economics
Languages : en
Pages : 206

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Book Description
Gerald P. Dwyer, Jr. and R. W. Hafer The articles and commentaries included in this volume were presented at the Federal Reserve Bank of St. Louis' thirteenth annual economic policy conference, held on October 21-22, 1988. The conference focused on the behavior of asset market prices, a topic of increasing interest to both the popular press and to academic journals as the bull market of the 1980s continued. The events that transpired during October, 1987, both in the United States and abroad, provide an informative setting to test alter native theories. In assembling the papers presented during this conference, we asked the authors to explore the issue of asset pricing and financial market behavior from several vantages. Was the crash evidence of the bursting of a speculative bubble? Do we know enough about the work ings of asset markets to hazard an intelligent guess why they dropped so dramatically in such a brief time? Do we know enough to propose regulatory changes that will prevent any such occurrence in the future, or do we want to even if we can? We think that the articles and commentaries contained in this volume provide significant insight to inform and to answer such questions. The article by Behzad Diba surveys existing theoretical and empirical research on rational bubbles in asset prices.

Author: David Western
Publisher: Taylor & Francis
ISBN: 1000107752
Category : Business & Economics
Languages : en
Pages : 256

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Book Description
An extremely user-friendly overview of the inner workings of the US stock market. Things have changed a great deal since the heady days of the 1980s and we are now entering an era of profound uncertainty, with most analysts predicting trouble ahead. Indeed, the alarming decline of the NASDAQ shows no sign of abating and the fear is that traditional industries will be the next to bite the dust. September 11th has only added to the gloomy mood. This book examines the current conditions before looking back to the events of the past century - The Great Depression, the 1970s oil crisis, the party-for-the-rich atmosphere of the 1980s and the emergence of the new economy.

Author: Ms.Anna Scherbina
Publisher: International Monetary Fund
ISBN: 1475515294
Category : Business & Economics
Languages : en
Pages : 41

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Book Description
Why do asset price bubbles continue to appear in various markets? This paper provides an overview of recent literature on bubbles, with significant attention given to behavioral models and rational models with frictions. Unlike the standard rational models, the new literature is able to model the common characteristics of historical bubble episodes and offer insights for how bubbles are initiated and sustained, the reasons they burst, and why arbitrage forces do not routinely step in to squash them. The latest U.S. real estate bubble is described in the context of this literature.