Speculative bubble, extrinsic (extrinsic bubble)

Investors buy stocks that are in high demand at the moment – sometimes also related to other tradable items on the stock exchange – in the expectation of further price increases, – which by itself increases their price, – and this causes further investors to buy this high flyer because they assume that the previous buyers have information that cannot be gleaned from the basic data available to everyone, – which again causes a price increase, and so on. – See equity bubble, asset price inflation, bear market, cyclical, bubble, speculative, domino effect, bull market, headline hysteria, herd behavior, high flyer, real estate bubble, myopia, market knowledge, central banking, milkmaid bull market, zero interest rate, rally, feedback loop, runup, sine curve fetishism, soft landing, tulip crash, exuberance, unreasonable, wealth effect, foreshadow effects, interest rate differential business. – Cf. ECB Monthly Bulletin, February 2002, p. 49.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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