On boom-bust stock market dynamics, animal spirits, and the destabilizing nature of temporarily attracting virtual fixed points

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F61989100%3A27510%2F24%3A10255634" target="_blank" >RIV/61989100:27510/24:10255634 - isvavai.cz</a>
Result on the web
<a href="https://www.cambridge.org/core/journals/macroeconomic-dynamics/article/on-boombust-stock-market-dynamics-animal-spirits-and-the-destabilizing-nature-of-temporarily-attracting-virtual-fixed-points/315C6BB0F10851BC290256BD056D8E5D" target="_blank" >https://www.cambridge.org/core/journals/macroeconomic-dynamics/article/on-boombust-stock-market-dynamics-animal-spirits-and-the-destabilizing-nature-of-temporarily-attracting-virtual-fixed-points/315C6BB0F10851BC290256BD056D8E5D</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1017/S1365100524000439" target="_blank" >10.1017/S1365100524000439</a>

Result language
angličtina
Original language name
On boom-bust stock market dynamics, animal spirits, and the destabilizing nature of temporarily attracting virtual fixed points
Original language description
We propose a stock market model with chartists, fundamentalists and market makers. Chartists chase stock price trends, fundamentalists bet on mean reversion, and market makers adjust stock prices to reflect current excess demand. Fundamentalists' perception of the stock market's fundamental value is subject to animal spirits. As long as the stock market is relatively stable, fundamentalists neutrally believe in a normal fundamental value. However, fundamentalists optimistically (pessimistically) believe in a high (low) fundamental value when the stock market rises (falls) sharply. Our framework may produce boom-bust stock market dynamics that coevolve with waves of optimism and pessimism for parameter settings that would ensure globally stable stock market dynamics in the absence of animal spirits. Responsible for such a surprising outcome is the destabilizing nature of temporarily attracting virtual fixed points, brought about by animal spirits.
Czech name
—
Czech description
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Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
—
OECD FORD branch
50200 - Economics and Business

Project
<a href="/en/project/GA22-28882S" target="_blank" >GA22-28882S: Interaction between Financial Markets and Real Sector: Modeling, Experiments, and Policy</a><br>
Continuities
P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)

Publication year
2024
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

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