SPECULATIVE BUBBLES AND FINANCIAL CRISES

Valentina Fetiniuc, Luchian Ivan and Sergiu Gherboveţ
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Valentina Fetiniuc: International Institute of Management IMI-NOVA, Chisinau, Republic of Moldova
Luchian Ivan: International Institute of Management IMI-NOVA, Chisinau, Republic of Moldova
Sergiu Gherboveţ: National Institute for Economic Research, Academy of Sciences of Moldova, Chişinău, Republic of Moldova

Journal of Financial and Monetary Economics, 2014, vol. 1, issue 1, 153-162

Abstract: The speculative bubble can be defined as the trade in high volumes at prices that are considerably at variance with intrinsic values of certain assets. The burst of speculative bubble can cause financial crisis in specific form created by situation of investment process dysfunction, when investors looking for investment refuges and refuse usual investment opportunities. This phenomenon can be a substantial basis of liquidity crisis and general financial crisis. Therefore is very important for regulation authorities to take in to account the possibility of this type of crisis to elaborate specific measures to prevent and reduce the consequences.

Keywords: bubble; crisis; asset; price; factors (search for similar items in EconPapers)
JEL-codes: G11 G12 G15 (search for similar items in EconPapers)
Date: 2014
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