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Was the fall of the stock market in 2008 the correction bubble?
[Являлось Ли Падение Фондового Рынка В 2008 Году Коррекцией Пузыря?]

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  • Chirkova, Elena (Чиркова, Елена)

    (National Research University Higher School of Economics)

Abstract

The article is diagnosed the presence of a bubble on the stock market in 2008 by analyzing the assumptions, direct and indirect signs of a bubble, as well as the analysis of price levels reached before the correction. The study showed that the formation of the prerequisites bubble in 2008 in Russia were favorable economic situation, credit growth and low cost of the loan, state investors. Factors "mass-to-market investors lay" and "the emergence of new communication tools" acted partially. Of the four analyzed indirect signs of a bubble two ("the flow of funds to the stock market from abroad 'and' increase in the number of investment funds") are mild, while two ("IPO growth and underestimation of the shares at the placement" and "narrowness of the market ') are absent. The Russian stock market was no direct evidence of such essential bubble is accelerating sharply rising prices, increased volatility and trading volume just before the collapse. There has been a deep fall was 80%, which, however, was offset by the high recovery rate of the index after correction.

Suggested Citation

  • Chirkova, Elena (Чиркова, Елена), 2014. "Was the fall of the stock market in 2008 the correction bubble? [Являлось Ли Падение Фондового Рынка В 2008 Году Коррекцией Пузыря?]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 3, pages 93-115.
    • Handle: RePEc:rnp:ecopol:ep1430
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    References listed on IDEAS

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    1. Froot, Kenneth A & Obstfeld, Maurice, 1991. "Intrinsic Bubbles: The Case of Stock Prices," American Economic Review, American Economic Association, vol. 81(5), pages 1189-1214, December.
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