Abstract
Much of bubble literature centred on financial markets.
Dominant theory – if prices deviate from fundamental value for some time then a bubble is said to exist.
Bubbles usually characterised in three main ways:
● momentum: driven by price alone;
● explosive: driven by factors extraneous to asset value;
● intrinsic: driven by overreaction to fundamentals.
This work: embedded in this stream of the financial economics literature but main focus is on the NZ housing market – although some stock market – housing market comparison conducted.