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Bubbles in sentence

660 examples of Bubbles in a sentence

Regulations should also have a strong counter-cyclical focus, preventing excessive accumulation of leverage and increasing capital and provisions (reserves) during booms, as well as preventing asset price bubbles from feeding into credit expansion.
With risk assets’ long-term valuation falling and pressure to prick price bubbles rising, China’s capital reserves will be insufficient to refinance the developed countries’ debts cheaply.
But the excesses were mainly in the private sector, as interest-rate convergence generated economic divergence: lower interest rates in the weaker countries fueled housing bubbles, while the strongest country, Germany, had to tighten its belt in order to cope with the burden of reunification.
This reflects the aftermath of wrenching balance-sheet recessions, in which aggregate demand, artificially propped up by asset-price bubbles, collapsed when the bubbles burst, leading to chronic impairment of overleveraged, asset-dependent consumers (America) and businesses (Japan).
In the absence of inflation, it was mainly warnings about new asset bubbles that pressured the Fed to curtail its purchases of long-term securities.
Bubbles should be a concern, but the June 19 episode in the US and China reminds us that addressing them is first and foremost the responsibility of regulators.
The important question now is whether today’s high asset prices are the result of some such fundamental development, or whether bubbles have formed.
Each crisis-hit economy had increased its financial leverage – the ratio of domestic credit to GDP – by 30 percentage points over five years shortly before their credit bubbles popped.
So it is doubtful that closer economic-policy coordination will prevent new bubbles from emerging.
Even when the frequent appearance of asset-price bubbles was acknowledged, most believed that efforts to detect and prick them at an early stage would be impossible – and potentially harmful.
Interest-rate cuts after bubbles burst would be a safer way to safeguard the economy.
If asset-price bubbles develop, balance sheets may look sound individually, but the entire network of interlinked asset-liability structures will become increasingly dependent on overvalued collateral, and thus vulnerable to financial contagion.
At first, the excess liquidity fueled real-estate bubbles.
But in today’s deflationary environment, typical monetary expansion alone can do little to help the real economy, because the money either remains idle or fuels asset bubbles and capital outflows.
That way, financial resources would be channeled into the real economy, rather than inflating asset bubbles.
Was he not a hard-core member of the “Greenspan consensus,” which held that it was not the Fed’s responsibility to look out for bubbles, whether of asset prices or credit, and that it should limit itself to mopping up after the event?
Yes, there are bubbles here and there, whether it is real estate in Shanghai and Dubai or stocks in Mumbai, but there has also been serious long-range planning that is likely to give these countries a strong position for years to come.
Blaming China merely impedes the heavy lifting that must be done at home – namely, boosting saving by cutting budget deficits and encouraging households to save income rather than rely on asset bubbles.
The continuous injection of liquidity would imply a greater likelihood of renewed asset bubbles in housing, equities, or modern art.
Japan’s woes are rooted in real-estate and equity bubbles, which were fueled by monetary expansion aimed at stimulating domestic demand after the 1985 Plaza Accord drove up the yen’s value and hurt Japan’s exports.
In the early 1990s, the bubbles burst, leaving the private sector with a huge debt overhang.
At the same time, fears that speculative bubbles in cryptocurrencies could drive macroeconomic instability appear overstated.
As Charles Kindelberger showed in his classic historical survey Manias, Panics, and Crashes, speculative bubbles and subsequent crashes sometimes lead to post-crash depressions.
There, capital inflows create asset bubbles that tend to overheat the domestic economy and drive up wages and consumer prices inordinately.
The costs of mild inflation are miniscule compared to the costs imposed on economies when central banks allow asset bubbles to grow unchecked.
But the creation of the euro caused a sharp fall in interest rates in the peripheral countries, leading to debt-financed housing bubbles and encouraging their governments to borrow to finance increased government spending.
In the years leading up to the crisis, two bubbles – property and credit – fueled a record-high personal-consumption binge.
When the bubbles burst, households understandably became fixated on balance-sheet repair – namely, paying down debt and rebuilding personal savings, rather than resuming excessive spending habits.
In a country plagued by excess capacity and housing bubbles, this was a prescient policy.
But this urban-based, export-led growth model also created more challenges than it can now handle: property bubbles, traffic jams, pollution, unsustainable local government debt, land-related corruption, and social unrest related to unequal access to social welfare.
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