Economics Questions

Re: Can some one explain in detail the causes of economic bubbles?

Physiocrat — Thu, 31 Jan 2008 10:53:36 GMT

IMO this is the best article on it: Toward a General Theory of Error Cycles by Guido Hulsmann

Re: Can some one explain in detail the causes of economic bubbles?

xahrx — Thu, 31 Jan 2008 04:00:19 GMT

New money + Easy Credit = Higher Prices. It's simple enough, and the inflationary price rise doesn't have to be general. It can be concentrated for various reasons in a narrow field, like real estate, basically because of how the new money finds its way into the economy. If for some reason the new money and credit ended up chasing cars, car prices would start inflating, jack ass financial advisors would start referring to Volvos and Hondas as sound investments, etc, until the contraction at which point the artifically created demand dries up and the bubble pops.

Can some one explain in detail the causes of economic bubbles?

RandyRDavila — Thu, 31 Jan 2008 02:48:00 GMT

I often wonder how to visualize bubbles in the economy. I have a generalized idea of how they form but I would like to be a little bit more informed before I open my mouth about this credit bubble that is bursting right now.