The Economic Bubble Existence And Governance And Its Enlightenment To China

Since the 1980 s, a series of bubbles has appeared in the international society, such as Japan’s economic bubble, Thailand’s economic bubble, the stock market bubble and real estate bubble in America, etc. Japan’s economy suffered severe damage because of the bursting of the bubble; Thailand’s economic bubble triggered the Southeast Asian financial crisis; the rupture of stock market bubble in the U.S. made impeded economic development and recession. Compared with the classical bubble, the formation, expansion, rupture and governance of the bubble is more complicated.Since reform and opening up, China started to change the planned economy into market economy, as a result, the scale of economy had a high-speed growth. But, more and more bubbles were formed and accumulated in the same process. Since 1993, real estate hot and Hainan real estate bubble, the storm of "327" national debt futures and a stock market bubble in 2007 occurred into China. These events caused certain negative influence to Chinese economic development. After that, a series of effective measures were adopted in time by the Chinese government, and therefore leave little serious harm to the economy. But in recent years, with the advancement of marketization in our country, the financial market has made a rapid development, the capital market also had received a increasing growth on the scale. But, the economic situation our country faced is becoming more and more complex. The speed of economic growth has began to slow in recent years, the real estate market also appear a larger fluctuation. Economic bubble, especially the real estate bubble problem has caused wide attention in domestic academic circles.So far, although domestic and foreign academic research on economic bubble have made a series of achievements, a complete theoretical system hasn’t been established. The definition of the bubble, the formation mechanism of the economic bubble, the test and measurement method of economic bubble and the impact on the economy of the bubble, have not formed a consolidated conclusion. Under the background of this kind of practice and theory, this article has carried on a comprehensive research on economic bubbles.In this paper, first of all, we define the economic bubble on the basis of combing the domestic and foreign research results, giving the definition of the bubble, understanding the bubble by comparing with other related concepts. On the basis of this definition, in contact of the real economic bubble, it is considered that the market information asymmetry and the irrational behavior like the herd behavior of noise traders, positive feedback trading, are the causes of the economic bubble in reality. On this basis, we construct the generation and operation system of economic bubble. According to the produce of the bubble and the type of foam in a running system, we put forward various methods to test and measure the economic bubble, thus it can give us the guidance of the reality of the existence of the bubble study. Secondly, we analyze the effects of the economic bubble in the process of production and operation based on the reality of the economic bubble, It is considered that there are more negative effects than positive effects, and it will destroy the stability of macroeconomic. Thus, in order to avoid or reduce the impact, measures must be taken to prevent or control the economic bubble.On the basis of the economic bubble theory research, this article firstly analyze the formation of some international typical bubble, as well as its influence and management. This article tries to find out what they have in common, and transform them into the inspiration of the prevention and governance of our country’s economic bubble. Secondly, we use the index method to measure the economic bubble, and it is concluded that the bubble exists in China’s current real estate market while there is no bubble in the stock market. We also analyze the cause and the expansion of the economic bubble from the reality of the economic system transition in China. Finally on the basis of related theory and practice research, we propose some policy suggestions of the prevention and management of our country’s economic bubble.