Business Intelligence

Market Bubbles And Chrashes

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Executive Summary

Episodes of market crashes have fascinated economists for centuries. Although many academics, practitioners and policy makers have studied questions related to collapsing asset price bubbles, there is little consensus yet about their causes and effects. This paper evaluates some of the hypotheses offered to explain the market crashes that often follow asset price bubbles. Starting from historical accounts and syntheses of past bubbles and crashes, the authors put the problem in perspective with respect to the development of the efficient market hypothesis.

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