The Green Stock Market Bubble

Abstract One may contend that there are some clear similarities between the market for sustainable assets now and situation of tech stocks right before collapse dot-com bubble. In fact, 2000, risk new technology was primarily idiosyncratic because limited scale production low likelihood a widespread adoption. Subsequently, with an increasing probability adoption, also, old economy affected by and, hence, wealth representative agent. As result, systematic increased, which depressed stock prices, it pushed up discount rates in economies. Similarly, given high large-scale adoption “green technology,” is likely not only bubble forming green energy stocks, but boom affecting as whole. I apply recently developed recursive testing procedure dating algorithm useful detecting multiple events. Using S&P 500 data, price-dividend ratios, identify well-known historical speculative bubbles find explosive movement today’s starting June 2021, can be associated technology.” started roughly year migrating to whole market. argue this good will enable businesses invest cheaply energy, hastening transition away from fossil fuels assisting fight against climate change.