'Emotional Inflation' Leads To Stock Market Meltdown

Investors get carried away with excitement and wishful 'fantasies' as the stock market soars, suppressing negative emotions warning them of high risks, according to a new study led by UCL. Economic models fail to factor in the emotions and unconscious mental life that drive human behavior says the study, which argues that banks and financial institutions should be as wary of 'emotional inflation' as they are fiscal inflation.