elemental forces that drove up the price of South Sea shares to dizzying heights in 1720 have in recent years produced the …

Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to … Sea Company faced in 1720. Several factors have been proposed as potentially contributing to one of the greatest periods …

Bubbles are usually viewed as a threat to financial stability. This paper takes a more nuanced view. The world economy … rate of the economy g. As is well-known, rational bubbles are sustainable when r ≤ g in a steady-state equilibrium. Bubbles … can then implement a dynamically efficient equilibrium. We show that from a structural point of view, bubbles, Pay …