1. Introduction/Background

This research paper consists of varying viewpoints of the overall impact of economic bubbles. An economic bubble has been defined as a period of time in an economy, where prices strongly vary from the average normal daily prices. While researching the topic of economic bubbles and their specific effects on the Global economy, I found multiple different viewpoints and information. Some economists believe that economic bubbles are not the best for the economy, but do share some positive effects that contribute to the amount of spending consumers partake in. On the Other hand, some believe that due to the strong unpredictability economic bubbles contain, they have a very negative role on the economy. They believe this because giving the economy for unpredictability makes it increasingly challenging to improve the economy in the future. With so many economic problems that occur every day, it is important to be constantly thinking about how economic leaders can improve the economy.

2. Against the Economic Bubble

The stability of the Global economy has been fluctuating for many years. It seems, though, that every time an economist attempts to predict the economy, it follows another path which makes the economy seem as though it has a mind of its own. With so many different influential factors that contribute to the stability of the economy around the world, it is difficult to ever be certain what the economy will do in the future. An economic bubble is one of these factors that contribute to the stability of an economy. An economic bubble is a dramatic and random change in prices throughout the market that cause others to assume that the economy is strongly heading in a specific direction. Economic bubbles are known to create this illusion, because they are known to drastically “pop” and cause greater setbacks in the present economy. When such a dramatic and random change occurs, it is hard for economists to predict the outcome of this change. In the field of public administration plays a large role in connecting the needs of the community with the government. The economy affects this aspect of public administration tremendously. For example, many jobs in this industry deal with helping organizations meet the needs of the community.

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If a natural disaster were to occur in a city workers in public administration would attempt to assist relief organizations as much as possible to help those affected. It would also be the job of those in public administration to go then communicate to the government when more resources were needed to assist citizens. If the economy is struggling, it is increasingly more difficult for those in public administration to get the resources they need. Economic bubbles cause drastic instability in the economy, which will affect the availability of such resources to workers of public administration. It is obviously important to the government, to attempt to keep the economy as stable as possible, so that when the country is in need, they are there to provide needed support. Some economists argue that the economic bubble creates a positive increase in the over spending of consumers for a short period of time, while others argue that an economic bubble creates such an increased sense of unpredictability within the economy, that the economic bubble only causes drastic negative effects on the economy.

With many new and educated economists emerging around the world every year, there always are multiple and opposing viewpoints on the global economy. The Journal of Prediction Markets (2007) written by Georgios Tziralis and Ilias Tatsiopoulos reviews much of the literature published about Prediction Markets. Tziralis and Tatsiopoulos (2007) state, “The scheme used represents the authors’ view of the focus and direction of PM (potential market) research and reveals a rapid growth in the number of published articles” (p.1) This quote represents the popularity of predicting and writing about the prediction of markets. With many countries longing for their own personal economies to stabilize, many outcomes have occurred in result of each countries attempt in improving their own economic stability. A recent online article published from the popular website “The Guardian” and written by Ha-Joon Chang, talks about recent non-stabilizing trends in the global economy.