economic bubble

Examples of economic bubble in the following topics:

• Wall Street Crash of 1929

  • Many Americans engaged in speculation before the crash, investing heavily as shares steadily rose until an unstable bubble had formed.
  • Speculation thus fueled further rises and created an economic bubble.
  • The decline in stock prices caused bankruptcies and severe macroeconomic difficulties, including contraction of credit, business closures, firing of workers, bank failures, decline of the money supply, and other economic depressing events.
  • According to economists such as Joseph Schumpeter and Nikolai Kondratieff, the crash was merely a historical event in the continuing process known as economic cycles.

• The New Era

  • The 1920s marked a new era of postwar economic growth in the U.S., fueled by electricity and oil but marred by controversies.
  • The economic bubble of the late 1920s under Hoover was reflected in the extension of credit to a dangerous degree, including in the stock market, which rose to record high levels.
  • Government size was at a very low level while at the same time government spending increased, causing greater economic freedom and prosperity.
  • President Herbert Hoover advocated individualism and business enterprise, but his policies that created an economic boom enabled credit extensions and speculation that resulted in the Stock Market Crash of 1929.

• The Second Bank of the United States

  • The Second Bank of the United States, like the First Bank before it, was created as part of the American System of economics.
  • After the war, and despite its debt, the United States experienced an economic boom due to the devastation of the Napoleonic Wars.
  • With such a boom, hardly anyone noticed the widespread fraud occurring at the bank as well as the economic bubble that had been created.

• The Panic of 1819

  • The Panic marked the end of the economic expansion that had followed the War of 1812 and ushered in new financial policies that would shape economic development.
  • The first major economic crisis after the War of 1812 was due, in large measure, to factors in the larger Atlantic economy.
  • The inflated economic bubble burst in 1819, resulting in the Panic of 1819.
  • President Monroe, interpreting the economic crisis in narrow monetary terms, limited governmental action to economizing and ensuring fiscal stability.
  • In an effort to stimulate the economy in the midst of the economic depression, Congress passed several acts modifying land sales.

• The Great Depression

  • The Great Depression was the result of an untimely collision of negative economic factors that began with the Wall Street Crash of October 1929 and rapidly spread worldwide.
  • Speculation thus fueled further rises and created an economic bubble.
  • According to economists such as Joseph Schumpeter and Nikolai Kondratieff, the crash was merely a historical event in the continuing process of economic cycles.
  • The net effect of the 1929 stock market crash was a sudden and general loss of confidence in the country's economic future.
  • The result was a Great Depression that showed the vast impact a nation’s economic health has on its overall wellbeing and the immense human toll such an event can cause.

• Economic Hardship and Labor Upheaval During the Transition to Peace

  • After World War I, the U.S. faced hard economic times and problems over labor, race and reintegration of veterans.
  • A wartime bubble in farm prices burst, leaving many farmers bankrupt or deeply in debt after purchasing new land.
  • An economic recession hit much of the world in the aftermath of World War I.
  • In the United States, 1918–1919 included a modest economic retreat, but the next year saw a mild recovery.
  • Discuss the causes of the post-war economic recession, and its effects on race relations and organized labor.

• The Financial Crisis

  • Despite economic growth in the 1990s and steadily increasing productivity, wages had remained largely flat relative to inflation since the end of the 1970s; despite the mild recovery, they remained so.
  • The result was a housing bubble, in which the value of homes rose year after year based on the ease with which people now could buy them.
  • The bursting of the U.S. housing bubble, which peaked in 2007, caused the values of securities tied to U.S. real estate pricing to plummet, damaging financial institutions globally.
  • With houses at record prices and growing economic uncertainty, people stopped buying new homes.
  • Some European nations had suffered similar speculation bubbles in housing, but all had bought into the mortgage securities market and suffered the losses of assets, jobs, and demand as a result.

• The "New Economy" of the 1990s

  • This particular use of the term was popular during the "dot-com bubble" of the late 1990s, in which the high growth, low inflation, and high employment of the period led to overly optimistic predictions and many flawed business plans.
  • After a nearly 60-year period of unprecedented growth, the United States experienced a much-discussed economic slowdown beginning in 1972.
  • However, around 1995, U.S. economic growth accelerated, driven by faster productivity growth.
  • In the financial markets, the new economy has been associated with the "dot-com bubble."
  • Newspapers and business leaders talked of new business models; some even claimed that the old laws of economics did not apply anymore and that new laws had taken their place.

• Changes in Agricultural Production

  • This caused the collapse of land prices after the wartime bubble when farmers used high prices to buy up tracts of land at high prices, saddling them with heavy debts.
  • A popular Tin Pan Alley song of 1919 asked a question with unintended economic ramifications about United States troops returning from World War I: "How Ya Gonna Keep 'Em Down On the Farm After They've Seen Paree?"
  • This was a direct cause and effect in terms of farmers migrating to urban areas even before the economic devastation of the Great Depression that came after 1929.

• Free Enterprise Economics and Reaganomics

  • "Reaganomics" refers to the economic policies promoted by the U.S.
  • His economic policies, called "Reaganomics" by the press, were based on a theory called supply-side economics, about which many economists were skeptical.
  • Economic growth would also increase the total tax revenue—even at a lower tax rate.
  • Reagan's policies proposed that economic growth would occur when marginal tax rates were low enough to spur investment, which would then lead to increased economic growth, higher employment, and higher wages.
  • Although liberal on some social issues, they were economically conservative.