Economic bubbles encourage innovation, but they also induce people to live beyond their means, financial experts said at a seminar here.
"Bubbles encourage innovation but also induce people to live beyond their means," MindTree's executive chairman, Ashok Soota, said.
The bubbles are difficult to predict but they inevitably burst, he said.
Pointing to a positive outcome from the global economic downturn, Bluestream India Advisors' managing partner, Brian Brown, said the recent downturn saw many emerging market companies turning global.
"In a downturn, you can see opportunities for emerging market companies to go global," Brown said.
Economic bubbles are not bad as all market downfall become opportunities for investors, he said.
However, Bank Julius Baer & Company's managing director and chief investment officer, V Anantha Nageswaran, differed in his views and said that bubbles were not good in the long term for investors.
"They (bubbles) have more cost than benefit – booms make assets affordable. When asset prices fall, the broader economy goes down with them," he said.
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