This paper reviews some of the most prominent asset price bubbles from the past 400 years and documents how central … banks (or other institutions) reacted to those bubbles. The historical evidence suggests that the emergence of bubbles is … also suggests that a purely passive “cleaning up the mess” stance toward the buildup of bubbles is, in many cases, costly …

: rational bubbles and financial frictions. We explain why each of these building blocks is crucial to understand recent events …

are too low. In this environment, changes in investor sentiment or market expectations can give rise to credit bubbles …

about mean payoffs, price bubbles arise without collateralisation, which may discipline prices as pessimists demand higher …

We examine how the banking sector may ignite the formation of asset price bubbles when there is access to abundant … bankers’ payoffs to downside risks and inducing excessive credit volume and asset price bubbles. The seeds of a crisis are …

The efficient markets hypothesis implies that, in the presence of rational investors, bubbles cannot develop. We …