The Hazards of Propping Up: Bubbles and Chaos

Details The Hazards of Propping Up: Bubbles and Chaos The Hazards of Propping Up: Bubbles and Chaos

2010-02-11

arxiv.org/abs/1002.2282v1

International Journal of Business and Finance Research 2009, vol. 3, no. 2, 83-93

Economy

Quantitative Finance

General Finance

Scientific paper

In the current environment of financial distress, many governments are likely to soon become major holders of financial assets, but the policy debate focuses only on the likelihood and extent of short-term market stabilization. This paper shows that government intervention and propping up are likely to lead to long-term bubbles and even wildly chaotic behavior. The discontinuities occur when the committed capital reaches a critical amount that depends on just two parameters: the market impact of trading and the target exposure percentage.

Affiliated with

Also associated with

No associations

Rating

The Hazards of Propping Up: Bubbles and Chaos does not yet have a rating. At this time, there are no reviews or comments for this scientific paper.

If you have personal experience with The Hazards of Propping Up: Bubbles and Chaos, we encourage you to share that experience with our LandOfFree.com community. Your opinion is very important and The Hazards of Propping Up: Bubbles and Chaos will most certainly appreciate the feedback.

Rate now

Comments { 0 }

Profile ID: LFWR-SCP-O-67935