2. What is Economic Bubble Sometimes referred to as a speculative bubble It could also be described as a trade inproducts or assets with inflated values. 3. Origin of term Bubble", in reference to financial crises Originated in the 17111720 British South SeaBubble 4. Impact Economic bubbles are generally considered tohave a negative impact on the economy Political economist Robert E. Wright arguesthat bubbles can be identified ex ante withhigh confidence. 5. Effect upon spending Market participants with overvalued assetstend to spend more because they "feel" richer(the wealth effect) But When the bubble inevitably bursts, thosewho hold on to these overvalued assetsusually experience a feeling of reduced wealth 6. Possible causes Bubbles occur when prices for a particularitem rise far above the items real value Some experts think that bubbles are related toinflation and therefore believe that the factorswhich cause inflation could also be the samefactors that cause bubbles to occur. 7. 1. Uranium Bubble 8. 2. Dot-com Bubble 9. 3. Poseidon Bubble 10. 4. Florida Land Boom 11. 5. Mississippi Bubble 12. 6. Romanian Property Bubble 13. 7. Railway Mania 14. 8. Rhodium Bubble 15. 9. South Sea Bubble 16. 10. Tulip Mania 17. How can economic bubbles be prevented? 18. Can Bubbles Benefit the Economy?