Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/313111 
Year of Publication: 
2025
Series/Report no.: 
Chemnitz Economic Papers No. 065
Publisher: 
Chemnitz University of Technology, Faculty of Economics and Business Administration, Chemnitz
Abstract: 
Financial bubbles and crashes have repeatedly caused economic turmoil notably but not only during the 2008 financial crisis. However, both in the popular press as well as scientific publications, the meaning of bubble is sometimes unspecified. Due to the multitude of bubble definitions, we conduct a systematic review with the following questions: What definitions of asset price bubbles exist in the literature? Which definitions are used in which disciplines and how frequently? We develop a system of definition categories and categorize a total of 122 papers from eleven research areas. Our results show that although one definition is indeed prevalent in the literature, the overall definition landscape is not uniform. Next to the mostly used definition as deviation from a present value of expected future cash flows, we identify several other definitions, which rely on price properties or other specifications of a fundamental value. This research contributes by shedding light on the possible variations in which bubbles are defined and operationalized.
Subjects: 
asset price bubble
fad
financial crisis
local martingale
fundamental analysis
Document Type: 
Working Paper

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