Measuring the bubble in mature and emerging equity markets

The paper defines "asset price bubbles" broadly and investigates their occurrence in the equity markets of 21 emerging and mature economies. Using a simple non-parametric test, it identifies 27 statistically significant bubbles. Measuring the time in months and percentage changes in prices from start to peak, peak to trough, and start to tough, it notes that equity prices typically end the cycle above their initial level, except in Asia, which raises questions regarding the reaction of monetary policy to asset price bubbles. The paper proposes that an international body should officially set the dates and measure the severity of financial disasters.