When and Where Can Institutionalization Occur? The Case of Price Bubbles in Financial Markets

Do women and men behave differently in financial asset markets? Our results from an asset market experiment show a marked gender difference in producing speculative price bubbles. Mixed markets show intermediate values, and a meta-analysis of 35 markets from different studies confirms the inverse relationship between the magnitude of price bubbles and the frequency of female traders in the market. Women's price forecasts also are significantly lower, even in the first period. Implications for financial markets and experimental methodology are discussed. (JEL D14, D81, G01, G11, J16)

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Effects of European Debt Crisis and Prospects of Euro Zone

World Economy and International Relations ◽

10.20542/0131-2227-2012-10-52-61 ◽

2012 ◽

pp. 52-61

Author(s):

D. Kondratov

Keyword(s):

Financial Markets ◽

Large Scale ◽

Debt Crisis ◽

Commodity Markets ◽

Fiscal Deficits ◽

Price Bubbles ◽

European Central ◽

Regulation Of Financial Markets ◽

National Economies ◽

Sustainable Economic Growth

The European economy is just recovering after the crisis and is facing numerous problems that prevent the transition to a sustainable economic growth. Among the most significant problems are massive fiscal deficits and public debt. This imposes the risks of default and can cause a collapse of national economies’ encouragement programs. Large-scale foreign trade imbalances threaten the already shaky stability of the global monetary and financial system. Huge amounts of speculative capital contribute to the formation of price bubbles in the domestic and international stock and commodity markets. It is obvious that these difficulties are systemic by their nature. In order to overcome them the leading European states have to undertake decisive and concerted measures for the restructuring of the existing economic order. An understanding of the respective need is currently declared at the highest political level, including the European Central Bank and G20. In practice, however, the efforts so far are concentrated mainly on the soft and cautious reform of the regulation of financial markets in the countries of the Eurozone. Implementation of the steps to create a more reliable and secure European financial and economic architecture is restrained by dramatic differences in the interests of the leading countries. According to most analysts, efforts to overcome this are likely to fail in the coming years. The failure to address fundamental problems of the financial crisis increases the uncertainty of the development of the European economy and creates the preconditions for new crisis situations.

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More Mortgages, More Homes? The Effect of Housing Financialization on Homeownership in Historical Perspective

Politics & Society ◽

10.1177/0032329218755750 ◽

2018 ◽

Vol 46 (2) ◽

pp. 177-203 ◽

Cited By ~ 12

Author(s):

Sebastian Kohl

Keyword(s):

Financial Markets ◽

Historical Perspective ◽

House Prices ◽

House Price ◽

Macroeconomic Performance ◽

Negative Effects ◽

Government Programs ◽

Mortgage Debt ◽

Price Bubbles ◽

Long Run

Recent research has emphasized the negative effects of finance on macroeconomic performance and even cautioned of a “finance curse.” As one of the main drivers of financial sector growth, mortgages have traditionally been hailed as increasing the number of homeowners in a country. This article uses long-run panel data for seventeen countries between 1920 (1950) and 2013 to show that the effect of the “great mortgaging” on homeownership rates is not universally positive. Increasing mortgage debt appears to be neither necessary nor sufficient for higher homeownership levels. There were periods of rising homeownership levels without much increase in mortgages before 1980, thanks to government programs, purchasing power increases, and less inflated house prices. There have also been mortgage increases without homeownership growth, but with house price bubbles thereafter. The liberalization of financial markets might after all be a poor substitute for more traditional housing policies.

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DETERMINATION of FINANCIAL LITERACY LEVEL: A STUDY on HITIT UNIVERSITY FACULTY of ECONOMICS and ADMINISTRATIVE SCIENCES STUDENTS

Journal of Economic Development Environment and People ◽

10.26458/jedep.v10i4.714 ◽

2021 ◽

Vol 10 (4) ◽

pp. 29-41

Author(s):

Selcuk Kendirli ◽

◽

Muhammet Selcuk Kaya ◽

Aykut Isleyen ◽

◽

...

Keyword(s):

Financial Markets ◽

Financial Literacy ◽

Credit Card ◽

Internet Banking ◽

University Faculty ◽

Price Bubbles ◽

Significant Relationships ◽

Literacy Level ◽

The Difference ◽

And Gender

Financial literacy is the level of financial knowledge, attitude and behavior that enables individuals to manage their income, expenses and assets in a way that does not cause financial problems both today and in the future. As individuals' financial literacy levels increase, unnecessary consumption and waste of resources will decrease and the efficiency of investments will increase. Increasing the level of financial literacy will ensure a more balanced formation of asset prices in financial markets and prevent the formation of price bubbles in the markets. Today, financial markets around the world are almost integrated, financial transactions have become possible quickly through portable electronic devices. In this environment, the difference in welfare between individuals and societies with financial literacy and individuals and societies without financial literacy has increased more than in any other period in history. This study, it is aimed to measure the financial literacy level of the students of Hitit University Faculty of Economics and Administrative Sciences located in the province of Çorum. The data of the study were obtained from a questionnaire with the participation of 400 students studying in 5 different departments. By using the percentages of the correct answers given to the questions, success scores were created based on departments. With the help of the T-test and ANOVA tests, the relationship between students' financial literacy and whether they use department, gender, class, and credit card was determined. As a result of the study, it was determined that there are significant relationships between the departments and classes in which students study and their financial literacy, and no significant relationships were found between their credit card and internet banking usage and gender and financial literacy.

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Governing Financialization

10.1093/oso/9780192897015.001.0001 ◽

2021 ◽

Author(s):

Jack Copley

Keyword(s):

Financial Markets ◽

Financial Liberalization ◽

Asset Price ◽

Economic Restructuring ◽

Big Bang ◽

Asset Price Bubbles ◽

Price Bubbles ◽

Neoliberal Ideology ◽

State Archives ◽

City Of London

Capitalism has become ‘financialized’. Since the 1970s, the swelling of financial markets and asset price bubbles has occurred alongside weaker underlying economic growth. Yet financialization was not a spontaneous market development—it was rather deeply political. States fuelled this process through policies of financial liberalization. Britain lies at the heart of this story. The British state’s radical financial liberalizations in the 1970s and 1980s were instrumental in creating a financialized global economic order in which the City of London emerged as a central hub. But why did the British state propel financialization? The conventional wisdom points to the lobbying power of financial elites and the strength of neoliberal ideology. However, this book offers an alternative explanation through an in-depth exploration of declassified state archives. By examining key financial liberalizations in the 1970s and 1980s—including the notorious ‘Big Bang’—this book argues that these policies were not part of an intentional scheme to create a new finance-led economic model. Instead, they were designed to address immediate governing dilemmas related to the grinding ‘stagflation’ crisis and its aftershocks. In this era, British governments found themselves trapped between global competitive pressures to enforce painful domestic adjustment and national political pressures to maintain existing living standards. Financial liberalization was pursued in a trial-and-error manner to navigate this dilemma. By unleashing financial markets, the state hoped to either postpone the worst effects of the crisis, or enact tough economic restructuring in an arm’s-length fashion. Financialization was an accidental outcome, not an intentional result.

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