Sudden or gradual changes in the expectations of market participants in general and of financial market players in particular, as in the case of the subprime crisis. – As financial psychology has shown, a change in sentiment can have a decisive impact on supply and demand in the financial markets almost completely independently of real economic conditions. Today, it is undisputed that a negative change in sentiment can have so much shearing force that it can steer an economy into a downward spiral (depressive maelstrom). – See Animal Spirits, banking crisis, memory, financial crisis, fear thesis, headline hysteria, herd behavior, market impact, sentiment indicators, loss of confidence, payday ground rule.
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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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