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Fact-based, data-driven research and analysis to advance democratic debate on vital issues shaping people’s lives.
Center for Economic and Policy Research
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August 2007, Dean Baker
This paper examines the factors that have led to the recent instability in financial markets, specifically the housing bubble and the recent run-up in stock prices. Prices in both the housing market and the stock market are often moved by psychological factors that have little to do with fundamentals.
