Study On Dynamic Early Warning Of Bubble Economy

In the process of economic development,the phenomenon of bubble economy occurs frequently.Human beings have repeatedly been affected by serious consequences brought by the bubble economy including the Mississippi Bubble in France and the South Sea Bubble in the UK in the 18th century,and bubble economy in Japan as well as the subprime mortgage crisis in America currently.On the one hand,the emergence of the bubble economy seriously affects the balance of the entire national economic structure;the extreme economic depression caused by its collapse also seriously hinders the economic development process on the other hand.Studies have shown that the bubble economy is based on the asset price bubble that has already appeared in the market.Due to the strong speculativeness and direct link with bank credit of the real estate market,the real estate price bubble is easily transmitted to the entire market,thus generating the bubble and further triggering a bubble economy.At the same time,China is going through a high real estate price bubble.Therefore,how to control the expansion of real estate price bubble and reduce the possibility of the bubble economy is a pressing problem that needs to be solved urgently in macroeconomic research at this stage.Regrettably,the current researches have not explored a set of reasonable and effective early warning system for the bubble economy to anticipate and prevent the occurrence of the bubble economy.In view of this,this paper proposes a dynamic early warning system for bubble economy based on the development of the bubble economy in order to monitor the different development stages of the bubble economy in real time,take countermeasures in advance,and reduce the probability of the bubble economy from the root cause.Firstly,on the basis of clarifying theconcept of bubble economy,this paper takes the development path of "stable economic development—real estate price bubble-bubble economy" as the research idea,and explores the path mechanism of the evolution of real estate price bubble to bubble economy.Secondly,from the two perspectives of "determining the early warning threshold—predicting the economicstatus",the paper constructs an early warning system for the bubble economy.By virtue of the international empirical data of 36 countries,the early warning thresholds of different development stages of the bubble economy could be obtained by the method of model construction and empirical research,and its effectiveness could also be verified.Then,based on the economic data of China,Japan and the United States,the case analysis would be carried out by using the dynamic early warning system constructed in this paper.Finally,from two perspectives of preventing the emergence of high-risk real estate price bubbles and the evolution of the price bubble to the bubble economy,the paper proposes countermeasures for the bubble economy.The main innovative work and conclusions of the above studies are as follows:Firstly,on the basis of clarifying the connotation and evolution mechanism of the bubble economy,a bubble economy measurement method based on wealth effect and investment effect is proposed,which makes the part of the unclear bubble economy phenomenon more specific.At present,the definition of the bubble economy concept in the academic world is not clear enough.Although some research results have been achieved,there are still situations in which the asset price bubble and the bubble economy are confused.In addition,the existing research on the bubble economy phenomenon is only through empirical analysis and literature summary,lacking of effective methods to measure the bubble economy,therefore,many studies ignore the bubble economy phenomenon that has already occurred.On the basis of deepening the connotation of the bubble economy,this paper finds out the corresponding measurement method from the perspectives of wealth effect and investment effect in the process of bubble economy evolution through its internal concept and evolution mechanism,and transforms the vague bubble economy concept into a measurable range,which not only lays the foundation for this paper and future researches,but also carries forward the researches on the relevant theories of the bubble economy.Secondly,based on the development stage of the bubble economy,the method of preventing the bubble economy is put forward.The existing researches on the precaution of the bubble economy mainly focuses on the causes of the bubble economy.However,the occurrence of the bubble economy is not an unexpected event,but a dynamic development process from the steady development of the economy to the occurrence of asset price bubbles and eventually to a bubble economy.Due to the particularity of the real estate market itself,most of the bubble economy in history has been triggered by the real estate price bubble.At the same time,if the real estate price bubble phenomenon existing in China is not controlled,it will evolve into a serious bubble economy phenomenon to a large extent.Therefore,this paper chooses the bubble economy evolution path of "stable economic development-real estate price bubble-bubble economy" as a new perspective,which will break through the original research on the causes of the bubble economy.Such perspective will not only lay a foundation for the construction of the early warning system of this paper,but also expand the research scope of the bubble economy.Thirdly,through the combination of empirical analysis and model construction,a dynamic early warning system for bubble economy is constructed.Due to the lack of clear samples and data,most existing studies related to the early warning of the bubble economy only give policy-level recommendations and lack of corresponding early warning systems.Based on the measurement of bubble economy interval,this paper firstly takes the bubble economy that occurred in different countries as samples through the international empirical data to overcome the problem of data volume.Secondly,this paper constructs a set of complete dynamic early warning system for bubble economy from the perspective of "determining the early warning threshold—predicting the economic status",in order to obtain the thresholds for different stages of development of the bubble economy on the one hand,and predict future economic status on the other hand.According to the comparison between the predicted value and the warning threshold,the purpose of warning is then achieved.Through the test results of the international empirical data on the effectiveness of the early warning system,the comprehensive identification accuracy rate of this early warning system is 75.48%,which can respond to the different development stages of the bubble economy in a timely manner,and provide a realistic basis for policy makers to regulate economic issues.This study not only overcomes the shortcomings of failing to achieve the early warning of bubble economy in existing research,but also break through and expand the precaution of bubble economy.Fourthly,according to the dynamic early warning system constructed in this paper,case studies are conducted in three representative countries of China,Japan and the United States in order to compare and analyze the common characteristics of the bubble economy,and propose countermeasure s.Based on the early warning system of bubble economy constructed in this paper,we analyze the economic status three representative countries including China,Japan and the United States from 1990 to 2016.The analysis of the phenomenon of the bubble economy has mainly focused on the phenomenon of the bubble economy that has occurred,and most of it is centered on the bubble economy of Japan in the 1980s.However,only summarizing the experience of a country during the bubble economy does not lead to its common features.Therefore,this paper takes the countries where there is no bubble economy but a high real estate price bubble,countries with serious bubble economy and countries with economic crisis after the bubble economy as samples,summarizes and analyzes the macroeconomic characteristics and policy measures before and after the bubble economy,so that the accuracy of the early warning system for bubble economy constructed in this paper could be verified on the one hand,and the common characteristics before and after the bubble economy could be found on the other hand in order to provide an empirical basis for proposing the universal countermeasures to prevent the bubble economy.In general,the research in this paper not only perfects the theoretical system of the bubble economy and provides the correct and reliable theoretical support for the government to effectively respond to the bubble economy,but also provides important reference for the government to conduct macroeconomic regulation and financial supervision in order to ensure the sound and stable development of our national economy.