The Early Warning Study Of Our Country's Stock Market Bubble

For centuries, stock market is always one of the key areas of scholars'research,and the research covers almost all aspects of this market, including the stock market bubble. From the Mississippi bubble and the South Sea Bubble in history to Japan and Taiwan's stock market bubble in the 1980s, the damage of the stock market bubble to the economy were presented to the people again and again, so the early warning analysis of the stock market bubble is of great significance in preventing and resolving financial risks, safeguarding the healthy development of the stock market and preventing the economic crisis, etc.The opening of the Shanghai Stock Exchange in 1990 marked the formal establishment of the stock market of our country. Although it has only 20 years of history, Chinese stock market has made tremendous achievements in both market size and the market system construction, which makes it an integral part of the whole economy. In 2007, the Shanghai index broke 3,000 points, which made the stock market bubble become a problem be concerned by many people, and people began to discuss whether the bubble exist in our stock market or not vigorously. Now, the theoretical study at home and abroad are mostly about the bubble of those developed mature markets , and lack of adequate research on the new transformation markets. Especially some unique factors of our country's stock market which caused bubble are not included in the present stock market bubble theoretical system, and the early warning study directly to the stock market bubble is even more rarely. In this context, using the theories and methods of statistical, behavioral finance, econometrics, and other related disciplines, this paper will make a systematic study of the market bubble of our country, such as the causes of Chinese stock market bubble, the economic impacts, and eventually settled at the stock market bubble of the early warning. The main ideas of this paper are as follows:In the first part, based on summarizing the existing literature, this paper explains the bubble theory, which covers meaning of the stock market bubble, the classification of the theoretical research on stock market bubble, and the detection of the bubble. And in this part it also explains the mutation theory which will be used on the later part of this article.In the second part, from the development of the stock market, the causes of the stock market bubble and risks of the stock market bubble, this paper analyzes the essential factors of the stock market bubble in Chinese stock market. Based on the three perspectives of intrinsic value of the stock, the price of the stock, and the system elements, this paper believes that it's normal to have bubble, but the bubble in our stock market is beyond the tolerance range which makes the economy be in danger. And then from two aspects of the presence and burst, this paper analyzes this danger.The third part and the fourth part are the key parts of this early warning research. This paper selects eight indicators, empirically analyzes our county's stock market bubble in 1999 January to 2010 December using the economic monitoring model of the mutation theory, and determines two mutate months. Then combined with the formula of the model, it makes the early warning scales of all indicators related to stock bubble. When the two mutate months are identified on contrast with the early warning list, they were confirmed.Finally in the fifth part, this paper presented to the government regulators a number of pre-control measures according to the problems existed in our stock market.