Use the Economics in Practice Titled "Bernanke's Bubble Laboratory: Princeton

question 73

Essay

Use the Economics in Practice titled "Bernanke's Bubble Laboratory: Princeton Protégés of Fed Chief Study the Economics of Manias" to answer the following question. According to the article what is the explanation for why bubbles emerge?

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Definitions:

Shareholders

Shareholders are individuals or entities that legally own one or more shares of stock in a public or private corporation, giving them a claim on its assets and earnings.

Regulators

Authorities or agencies responsible for overseeing and enforcing laws within specific industries to ensure fairness, safety, and compliance.

External Auditors

Independent accountants or auditing firms that examine a company's financial statements and practices to ensure accuracy, compliance, and fairness.

Financial Statements

Consolidated documents that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.