One view is through its effect on demand. It shocked demand downwards, and thus lowering output, employment, and income. This was demonstrated by Josh Bivens and Hedi Shierholz study in Ch.4 “The Great Recession’s impact on Jobs, Wages, and Income,” in Oxford Handbook of “The Political Economy of Financial Crises,” 2013.
You may want to examine some supply side phenomena as well such as how deviation from rational expectation or efficient market hypothesis about assets prices impacts the economy thru misperceptions etc.
Impact of asset buble can be gauged through macro-economic indicators such as gdp growth, employment, output, etc.
There are a variety of measurements possible based on the angle you chose to approach. To name a few:
1. Assets value loss (total at market value, average per unit, percentage of market value, percentage per unit)
2. Company failures
3. Jobs lost
4. Connected assets value loss
5. Taxation income lost
6. Revenues lost, customers lost,
The list could continue, as more and more stakeholders are facing consequences.
Hello!
Please find enclosed a relevant paper:
Risk Measures and the Impact of Asset Price Bubbles
Robert A. Jarrow
Cornell University - Samuel Curtis Johnson Graduate School of Management
Felipe Bastos G. Silva
Cornell University - Samuel Curtis Johnson Graduate School of Management
May 7, 2014
Best regards,
Monica
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