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Mathematically detecting stock market bubbles before they burst

From the dotcom bust in the late nineties to the housing crash in the run-up to the 2008 crisis, financial bubbles have been a topic of major concern. Identifying bubbles is important in order to prevent collapses that can severely impact nations and economies. A mathematical model has now been proposed for the detection of financial bubbles in order to prevent their collapse.

Quoted from Mathematically detecting stock market bubbles before they burst on ScienceDaily: Top News

Mathematically detecting bubbles before they burst 31 October 2011 From the dot bust in the late nineties to the housing crash in the run-up to the 2008 crisis, A financial bubble occurs when prices for assets, such as stocks, rise far above their actual value. Such an economic cycle is usually characterized by rapid expansion followed by a contraction, or sharp decline in Yes, you pute a standard deviation, but volatility is the annualized standard deviation of the price returns, not the prices. So, lets say you use weekly price data, and let [math]S_i[/math] be Tags: what, mathematical, formula, determine, Mathematically detecting bubbles before they Citation: (2011, October 31) retrieved 5 August 2019 from https://phys.org/news/2011-10-.html This document is subject to copyright. Diss. ETH No. in Financial s: Fundamental and Dynamical Approaches A thesis submitted to attain the degree of Doctor of Sciences of ETH Zurich

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