Bubbles and Crashes


Course Objective

The goal of the course is to introduce you to the economic thinking on
the causes of stock market bubbles and crashes. Two additional goals are
the development of your discussion skills and writing in English.

Course Content

The financial crisis that started in 2007/2008 led to the most serious
economic and financial crisis since the 1930s. However, many of the
elements of the current crisis are not new. In fact, there is a whole
body of literature studying bubbles and crashes. In this course, we will
learn about historical bubbles, crises and their causes, and the
economic models that offer an explanation for these phenomena. The
models include behavioral finance explanations as well as classical
theories on the behavior of lenders, borrowers, investors and political

Teaching Methods

The course is structured as a series of discussion sessions, for which
students prepare discussion questions on selected academic papers.
The role of chair is rotated among students. Three assignments deal with
(i) identifying stock market crashes, (ii) predicting crashes, and (iii)
setting up and evaluating an investment strategy that exploits bubble
and crash patterns over time.

Method of Assessment

The course grade consists for 50% of preparation and in-class
participation and for 50% of the assignments.


Literature (links) are provided.

Target Audience

The intented audience is second and third-year students of Economics and
Business Economics, (International) Business Administration and

Custom Course Registration

SBE rules and dates apply for this SBE HP course. Registration via VUnet.

General Information

Course Code E_HP1_BC
Credits 6 EC
Period P5
Course Level 300
Language of Tuition English
Faculty School of Business and Economics
Course Coordinator dr. A.H. Siegmann
Examiner dr. A.H. Siegmann
Teaching Staff dr. A.H. Siegmann

Practical Information

You need to register for this course yourself

Last-minute registration is available for this course.

Teaching Methods Lecture
Target audiences

This course is also available as: