What risks do asset price bubbles pose for the economy? This paper studies bubbles in housing and equity markets in 17 … countries over the past 140 years. History shows that not all bubbles are alike. Some have enormous costs for the economy, while … others blow over. We demonstrate that what makes some bubbles more dangerous than others is credit. When fueled by credit …

spending – combined with investment theory – to estimate the discount rates used by managers. The standard story predicts that … between 15.1% and 45.2% too much capital. These estimates suggest that, even before they burst, bubbles adversely affect …

We develop a model of rational bubbles based on leverage and the assumption of an imprecisely known maximum market size … lend to traders with limited liability in a bubble is endogenous. Bubbles reduce welfare of future investors. We provide … general conditions for the possibility of bubbles depending on uncertainty about market size, traders' degree of leverage and …

interaction mitigates or reinforces antagonism towards other groups, the micro-founded theory we develop predicts that a country …