are too low. In this environment, changes in investor sentiment or market expectations can give rise to credit bubbles … instead by expectations of future credit (i.e. bubbly collateral). Credit bubbles raise the availability of credit for …

Smith et al. (1988) reported large bubbles and crashes in experimental asset markets, a result that has been replicated … by a large literature. Here we test whether the occurrence of bubbles depends on the experimental subjects' cognitive … in the sessions populated by subjects with low levels of cognitive sophistication. Yet, no bubbles or crashes are …

We develop a stylized model of economic growth with bubbles. In this model, changes in investor sentiment lead to the … appearance and collapse of macroeconomic bubbles or pyramid schemes. We show how these bubbles mitigate the effects of financial … frictions. During bubbly episodes, unproductive investors demand bubbles while productive investors supply them. These transfers …