<p>This a highly disputed question! There is a new and interesting paper by Òscar Jordà, Moritz Schularick and Alan M. Taylor about "<a href="http://economics.ucdavis.edu/people/amtaylor/files/w21486.pdf" rel="nofollow">Leveraged bubbles</a>". They study bubbles in housing and equity markets in 17 countries over the past 140 years. </p>

CC BY-SA 3.0
2015-11-08T18:25:05.317Z
2015-11-08T18:25:05.317Z
emeryville
<p>How do one know whether an appreciation in the price of an asset is a bubble or not? For example, during the 2007-2008 crisis, there was a housing bubble, which is only mainly agreed upon when the bubble actually starts to burst. Beforehand, however, the rise in housing price was not commonly accepted as a bubble, especially during the period when the housing price was still rising before the crisis.</p>

<p>So how do we know whether an appreciation is a bubble or not?</p>

<p>Any suggestions of articles about the issue are appreciated.</p>

CC BY-SA 3.0
2015-11-09T02:41:13.720Z
Some hardcore rational expectations researchers consider multiple equilibria as bubbles. They usually proceed by claiming that thus bubbles do not exist or are even beneficial.
HRSE
<economic-bubble>
What is an economic bubble?
Kun
# What is an economic bubble?

(Asked by: username_0 on 2015-11-08)

How do one know whether an appreciation in the price of an asset is a bubble or not? For example, during the 2007-2008 crisis, there was a housing bubble, which is only mainly agreed upon when the bubble actually starts to burst. Beforehand, however, the rise in housing price was not commonly accepted as a bubble, especially during the period when the housing price was still rising before the crisis.

So how do we know whether an appreciation is a bubble or not?

Any suggestions of articles about the issue are appreciated.

**Tags:** economic-bubble

> **Comments:**
> **username_1**: Some hardcore rational expectations researchers consider multiple equilibria as bubbles. They usually proceed by claiming that thus bubbles do not exist or are even beneficial.  

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## 1 answers

### Answer by username_2 on 2015-11-08. Score: 3 | Accepted answer

This a highly disputed question! There is a new and interesting paper by Òscar Jordà, Moritz Schularick and Alan M. Taylor about "[Leveraged bubbles](http://economics.ucdavis.edu/people/amtaylor/files/w21486.pdf)". They study bubbles in housing and equity markets in 17 countries over the past 140 years.


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