Analysis of the Share Price Bubbles in the Baltic Countries

  • Marius Dubnikovas
  • Vera Moskaliova
  • Stasys Girdzijauskas
Conference paper
Part of the Lecture Notes in Business Information Processing book series (LNBIP, volume 37)

Abstract

The last two years where marked with the formation of a number of financial bubbles and their bursts in various markets of capital, real estate and raw materials. The years 2007-2008 became a large scale trial both for professional and home economy that unavoidably was related with finance. Both bubble formation and burst determined the damage of the clients’ global confidence in financial institutions and confounded their expectations. It caused corrections in the economic growth prediction since a number of countries found themselves on the verge of financial crisis. Three Baltic states that were earlier called the tigers of the European growth had encountered the described situations with the special difficulty – the indices of consumer and business confidence decreased by ten years; the growth of gross internal product decreased to minimum, or even acquired the features of recession, and the capital markets lost about one third of capitalization. The paper aims at the analysis of the alteration of the share market in the three Baltic countries – Lithuania, Latvia and Estonia – during the last nine years with regard to price bubble formation and bubble bursts. The research was carried out with the use of the comparative analysis of the scientific literature, the method of mathematical analysis and generalization. The analysis revealing how the three capital markets reached the level of capital saturation and when it manifested itself was performed with the computation program “Loglet Lab2”.

Keywords

share price bubble logistic growth model Baltic stock exchange index 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2009

Authors and Affiliations

  • Marius Dubnikovas
    • 2
  • Vera Moskaliova
    • 1
  • Stasys Girdzijauskas
    • 1
  1. 1.Vilnius UniversityKaunasLithuania
  2. 2.FBC ”Jusu tarpininkas”KaunasLithuania

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