Page 49 - Zenith 2023-웹용

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For a bubble to burst, the only thing
needed is the collective realization
that the price of a tulip or stock
far exceeds its worth. That’s what
happened in both cases. After
sudden realization, the demand
simply ended. Prices plummeting to
staggering lows, the bubble popping
and the market crashing in the
aftermath. The tulip story effectively illustrates the principles at work when a market bubble
forms. This helps us to better understand recent economic booms and busts. For instance,
the Japanese asset price bubble can be explained with these principles. Due to increased
demand, the prices for real estate and stock were greatly inflated. Then pop! The bubble
popped. And with that, the Japanese economy followed, experiencing the worst economic
decline in the nation’s history. The failure of the Japanese government to prevent further
economic downfall brought down the entire nation along with it. To this day, the Japanese
economy hasn’t been able to fully recover.

The current economic situation in Korea is advancing much in the way that Japan’s economy
did 30 years prior. In order to sustain our economic growth, the Korean government must
act accordingly to prevent possible economic threats, economic bubbles likewise.

Bubbles are a ubiquitous phenomenon in the world of economics. That is, if you were to
invest, an economic bubble is something to look out for.

Lee Seung-hyun
(English-Spanish dept. 1st grade)
Seunghyunleems@gmail.com