This paper provides a guide to macroeconomic applications of the theory of rational bubbles. It shows that rational … bubbles can be easily incorporated into standard macroeconomic models, and illustrates how they can be used to account for … important macroeconomic phenomena. It also discusses the welfare implications of rational bubbles and the role of policy in …

The world has a shortage of financial assets. Asset supply is having a hard time keeping up with the global demand for … speculative bubbles (which recently have transited from emerging markets, to the dot-coms, to real estate, to gold...), the … and deflationary episodes in parts of the world, all fall into place once one adopts this asset shortage perspective …

are associated with lower spreads between the country's borrowing rate and world interest rates. Both effects jointly …

We evaluate Eugene Fama's claim that stock prices do not exhibit price bubbles. Based on US industry returns 1926 …

History is important to the study of financial bubbles precisely because they are extremely rare events, but history … can be misleading. The rarity of bubbles in the historical record makes the sample size for inference small. Restricting … examine the frequency of large, sudden increases in market value in a broad panel data of world equity markets extending from …

We live in a new world economy characterized by financial globalization and historically low interest rates. This … environment is conducive to countries experiencing credit bubbles that have large macroeconomic effects at home and are quickly … propagated abroad. In previous work, we built on the theory of rational bubbles to develop a framework to think about the origins …