A Simple No-Bubble Theorem
This paper establishes a simple no-bubble theorem that applies to a wide range of deterministic models with in nitely lived consumers. Our model assumes only a sequential budget constraint and strictly monotone preferences. In this general setup, we show that asset bubbles are impossible if a consumer can reduce his asset holdings permanently. This is a substantial generalization of the result of Kocherlakota (1992) on asset bubbles and short-sales constraints.
Year of publication: |
2015-01
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Authors: | Kamihigashi, Takashi |
Institutions: | Research Institute for Economics and Business Administration, Kobe University |
Saved in:
freely available
Extent: | application/pdf |
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Series: | Discussion Paper Series. - ISSN 1345-2207. |
Type of publication: | Book / Working Paper |
Notes: | Number DP2015-03 17 pages |
Source: |
Persistent link: https://www.econbiz.de/10011182960
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