Re: Definition of Economic bubble
in a bubble, the paper claims on wealth (stocks) never corresponded to -- and in fact exceeded the value of -- the actual wealth (factories, machinery, patents, etc.) It's the paper claims that get devalued when a bubble pops. The actual wealth doesn't disappear as part of the bubble popping, though they may be scrapped -- or may lose market value -- if the financial crisis leads to or triggers a real economic crisis. Jim Devine ^^^^^^ CB: I believe that at any one time, a very significant proportion of the total wealth of the world is in the form of paper that does not correspond to the actual wealth. I keep trying to think of what impact that has in terms of the economic power of those who hold the highest proportions and largest blocks of the paper wealth.
