The Study On China's Asset Price Bubbles

Asset price bubble is economic phenomenon that the price deviates its basic value drastically in the credit economic environment. The assets price bubble occurs with the economic development. There are many reasons lead to the bubble, including micro-factors and macro-factors.The occurrence and disappearance of the bubble has certain damage to the economic development. From the history, we can learn that the bubble leads to finance crisis and even economy crisis, and the bubble can lead the economic chaos, the increasing of bad asset also, and so on.After China reform, especially entering WTO, China economy develops quickly, but with the quickly development is the negative effect, for example, economic bubble, which has bad effect to national economy. How to resolve the bubble problem becomes more and more important to us. In order to solve it, we should analyze the bubble's reasons and effects. The article links up the China's reality to analyze the bubble's reasons and raises some countermeasures.There are four chapters in the article. The first chapter is to introduce some concepts and the relationship between capital asset price bubble and bubble economy, and analyze the economic effect of bubble. The second chapter introduces some typical bubble examples to elaborate the process, working rule and the spreading channel of the bubble. The third chapter discusses the reasons of the bubble, the reasons including moral risk, human's limited rationality, fund manager, the supplying of capital asset and market validity, information incompleteness, the defect of security market system, the relation of entity and simulation economy, public opinion and information technology. The last chapter is about some suggestions for the policy to prevent and administer capital asset bubble on the basis of the previous theoretical analysis.