<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>As an emerging financial instrument, the risk of asset price bubbles is becoming more and more prominent and has a far-reaching impact on the global financial market. Based on the ADF model and PSY algorithm, the study constructs an asset price bubble identification model, explores the formation mechanism of asset price bubbles in the financial market, the contagion effect of asset price bubbles in the inter-market, and ultimately puts forward suggestions for targeted regulatory strategies. In the numerical simulation of the formation mechanism of asset price bubbles, both Bubble 1 and Bubble 2 experience 10 periods, and the peaks of the two bubbles appear at t=14 and t=34.5, respectively. The rate of rise of asset prices is slower than the rate of decline, and the impact on the financial market is greater when the financial asset bubble bursts. There is a two-way bidirectional contagion effect between the three markets of stock, bond, and property. Therefore, regulation of asset price bubbles should focus on improving the stock market trading system, publicizing and educating, and restricting real estate loans.</p>
</abstract>

As an emerging financial instrument, the risk of asset price bubbles is becoming more and more prominent and has a far-reaching impact on the global financial market. Based on the ADF model and PSY algorithm, the study constructs an asset price bubble identification model, explores the formation mechanism of asset price bubbles in the financial market, the contagion effect of asset price bubbles in the inter-market, and ultimately puts forward suggestions for targeted regulatory strategies. In the numerical simulation of the formation mechanism of asset price bubbles, both Bubble 1 and Bubble 2 experience 10 periods, and the peaks of the two bubbles appear at t=14 and t=34.5, respectively. The rate of rise of asset prices is slower than the rate of decline, and the impact on the financial market is greater when the financial asset bubble bursts. There is a two-way bidirectional contagion effect between the three markets of stock, bond, and property. Therefore, regulation of asset price bubbles should focus on improving the stock market trading system, publicizing and educating, and restricting real estate loans.

Research on the Formation Mechanism, Contagion Effect and Regulatory Strategy of Digital Asset Price Bubble Risk in the Information Age

Applied Mathematics and Nonlinear Sciences

This work is licensed under the Creative Commons Attribution 4.0 International License.

As an emerging financial instrument, the risk of asset price bubbles is becoming more and more prominent and has a far-reaching impact on the global financial...

Research on the Formation Mechanism, Contagion Effect and Regulatory Strategy of Digital Asset Price Bubble Risk in the Information Age

Published Online: Jul 09, 2024

Page range: -

Received: Mar 02, 2024

Accepted: May 28, 2024

DOI: https://doi.org/10.2478/amns-2024-1812

Keywords
ADF model, PSY algorithm, Asset price bubble, Formation mechanism, Contagion effect

© 2024 Xiangfang Ku., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Research on the Formation Mechanism, Contagion Effect and Regulatory Strategy of Digital Asset Price Bubble Risk in the Information Age

Published Online: Jul 09, 2024

Page range: -

Received: Mar 02, 2024

Accepted: May 28, 2024

DOI: https://doi.org/10.2478/amns-2024-1812

KeywordsADF model, PSY algorithm, Asset price bubble, Formation mechanism, Contagion effect

© 2024 Xiangfang Ku., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
ADF model, PSY algorithm, Asset price bubble, Formation mechanism, Contagion effect