Dealing with Asset Bubbles

Asset Bubbles have always been a debatable issue in the field of Economics and Finance. Till now we have witnessed quite a handful of them but we are yet to develop a concrete strategy to tackle the same. This paper provides an insight into the various mathematical know how's of an asset bubble and is quite pertinent concerning the Buyer Seller model which armours us with an appropriate model to detect asset bubbles. Significant amount of expertise is called for the implementation of this model which ranges from determination of important coefficients to the final execution. In fact one of the reasons for the yet unresolved problem of bubbles is the human psychological factor involved in it. This paper touches upon the field of Behavioural Finance to provide an insight into the same. A slew of measures exist in the current literature which throw light on the factors contributing to bubbles and how they can be curtailed. These are discussed under literature review. This paper tries to move a step further and discusses the feasibility of the well known concept of Non-profit Organization (NPO) as a vigilant in this era of ever changing dynamics. It will provide an analytical insight into the various indicators which when implemented in the monetary and other policies will help an economy steer its ship without colliding with this fatal iceberg known as “bubble”. History has witnessed that the Titanics which carry the investors caught up in bubbles have much larger capacity, much higher glamour but sink deep and leave yet another grave mark in history