Financial Bubble To Run And Control

A series of bubble crash incidents have been taking place since the I 980s. The long and devastating influence of these incidents on Asia and even the entire world reflects the enormous damage done to the economy by the over-expansion and crash of the financial bubbles. On the other hand, however, the bubbles in the American capital market have been expanding consistently ever since the 1980s, which to some extent sustain the American economy in the continuous high growth, low inflation and low unemployment The bubbles at the same time accelerate the emergence and development of the change of new economy appeared in the recent years with Internet as its representative. It is obvious that financial bubble is a double-edged sword, and the key is how to control it effectively in order to promote the beneficial and abolish the harmful. Our countly is in the course of the transfer from planned economy to market economy. With the rapid development of financial market and the ever-increasing expansion of the capital market, more and more bubbles have been accumulated in the economic body of our country. If these increasingly expanding bubbles cannot be eliminated effectively and timely, the macro-financial risks will be greatly increased. In addition, China抯 entering of WTO, the increasing extent of the opening to foreign countries, the globalization of the economy and the expedition of progress toward internationalization of the capital market will hasten the risks of expanding and crashing of the existed financial bubbles in our country. Therefore, it is necessary to go further into the performance and control of the financial bubbles in order to benefit the economy, guard against and eliminate the risks of financial bubbles. The research of the financial bubble theory is a current issue, and much of it is still lack of verdict. The theoretical research in this field is still at its early stage. No complete system has been established so far, and many fundamental problems demand further study. It is obvious that all these cannot accommodate to the change of the current international financial situation and the need of accelerating economic system reform and market construction. Hence, a good many problems such as how to define and measure bubbles reasonably, how to reveal the fanning and performing system of the bubbles, how to analyze and estimate the influence that bubbles bring to the economy objectively and how to control bubbles, guard against and eliminate the risks from bubble crashes demand a systematic and explicit answer immediately. It is the springboard of this dissertation. Based on the research of the above-mentioned problems, the ultimate goal of this dissertation is to advance the optimum controlling path of Abstract the financial bubbles and the effective controlling countermeasures in China. The analysis above shows that the research into the performance and control of the financial bubbles has great significance on both economic theory and economic development and reform-and-open practice in China. On one hand, the research into the forming and the performing system of the financial bubbles will develop and enrich the current theories on bubbles, systematizing and completing them; the research into the influence on economy of the financial bubbles and the systematically performing and controlling path of the financial bubbles will make up the insufficiency of the current research in this field, hence lay a solid foundation on the furt...