2. The explanation of the real estate bubble
Charles kindleberger wrote in the entry "bubble" written for the New palgrave Dictionary of Economics: "A bubble can be broadly defined as a sharp rise in the price of an asset or a series of assets in a continuous process. The initial price increase makes people expect the price to rise further, thus attracting new buyers-these people are generally speculators who make profits by buying and selling assets, but they are actually not interested in the use of assets and their profitability. As prices rise, they are often expected to reverse and prices plummet, which usually leads to a financial crisis. "
The so-called bubble refers to the sudden rise in the price of an asset during the continuous trading process, and the price seriously deviates from the value. At this time, the economy is full of currency bubbles that cannot reflect material wealth. When the asset price rises to an unbearable level, it will inevitably plummet, as if the bubble burst and the economy began to turn from prosperity to recession. This is the so-called "bubble economy". The two characteristics of bubble economy are: the supply and demand of commodities are seriously unbalanced, and the demand is far greater than the supply; Speculative trading atmosphere is very strong. The real estate bubble is a kind of bubble, and it is a bubble economy with real estate as the carrier. It refers to the serious deviation between real estate price and value caused by real estate speculation, and the market price is divorced from the support of actual users. The earliest real estate bubble that can be verified is the Florida real estate bubble from 1923 to 1926. This frenzy of real estate speculation once triggered the collapse of Wall Street stock market, and led to the global economic crisis led by the United States in the 1930s, which eventually led to the outbreak of World War II. Japan's land price bubble, which began to accumulate in the 1970s and burst in the early 1990s, is the longest-lasting real estate bubble in history. From the bursting of the land price bubble of 199 1 to now, Japan's economy has never been out of the shadow of depression, and even compared to another "defeat" of Japan after World War II.