Summary Models which are built on the assumption of rational expectations can easily outline the conditions under which bubbles may exist but they remain silent on the factors that cause the price to deviate from the fundamental value. In this paper it is argued that dynamic extensions of the...

Der vorliegende Band enthält zehn Beiträge aus der Arbeit des Evolutorischen Ausschusses, die sich aus unterschiedlichen Perspektiven mit dem Kerngegenstand der Evolutorischen Ökonomik, dem wirtschaftlichen Wandel, auseinandersetzen. Damit reflektiert der Band die Komplexität des...

This book sheds new light on the role of speculative bubbles in the stock market and argues that, provided they are sustainable, bubbles may in fact have a positive effect on the market.

Several studies published in the early 1990s found that a large fraction of stock return variations can be explained by future values of measures of real activity in the United States by using data samples from the 1950s to the 1980s. This paper presents evidence that the relation does not hold...

It is well known that bubbles possess the potential to increase economic welfare due to a reduction of capital accumulation in deterministic overlapping generations economies that are in a dynamically inefficient state. However, actual economies are stochastic, where the concept of dynamic...