Detecting Multiple Bubbles and Exuberance in Financial Data: An Extensive Empirical Examination over Four Major Foreign Indexes

History is replete with incidents of financial crisis, which ex-post become a wakeup call for policy makers and the people. But there were no tests which could identify and date financial bubbles in real time, till now. Phillips, Shi and Yu [2015] provides the first and only model to recursively examine for multiple bubbles. Their “flexible window” methodology provides consistent results and has successfully identified the well-known historical episodes of exuberance and collapse. This accuracy provides very useful “warning alerts” to central bankers, fiscal regulators and policy makers to pre-emptively act and possibly eliminate an impending implosion. We extensively examine for the presence and recurrence of multiple bubbles, over four major financial indexes. We find evidence of bubbles and explosive sub-periods over the longterm data for all of the indices, including deciphering the technology bubbles of the 1990s and early 2000s, and the financial crises of 2008