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Lessons from the Great American Real Estate Boom and Bust of the 1920s
White, Eugene N. - 2010
Although long obscured by the Great Depression, the nationwide "bubble" that appeared in the early 1920s and burst in 1926 was similar in magnitude to the recent real estate boom and bust. Fundamentals, including a post-war construction catch-up, low interest rates and a "Greenspan put," helped...
Persistent link: https://www.econbiz.de/10013149972
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The International Transmission of Credit Bubbles : Theory and Policy
Ventura, Jaume - 2015
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 … and domestic effects of these credit bubbles. This paper extends that framework to two-country setting and studies the …
Persistent link: https://www.econbiz.de/10013028542
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Monetary Policy and Asset Prices : A Look Back at Past U.S. Stock Market Booms
Bordo, Michael D. - 2011
This paper examines the economic environments in which past U.S. stock market booms occurred as a first step toward understanding how asset price booms come about and whether monetary policy should be used to defuse booms. We identify several episodes of sustained rapid rise in equity prices in...
Persistent link: https://www.econbiz.de/10013127756
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Pride Goes Before a Fall : Federal Reserve Policy and Asset Markets
Reinhart, Carmen M. - 2011
Considerable debate rages about whether Federal Reserve policy was too lax in the early part of the 2000s, thereby fueling the home-price bubble that was the proximate cause of the global financial crisis. We present evidence that the view that modest alterations to monetary policy have vast...
Persistent link: https://www.econbiz.de/10013129137
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Bubbly Liquidity
Farhi, Emmanuel - 2011
This paper analyzes the possibility and the consequences of rational bubbles in a dy- namic economy where financially … (scarce). We analyze extensions with firm heterogeneity and sto- chastic bubbles …
Persistent link: https://www.econbiz.de/10013130781
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Theoretical Notes on Bubbles and the Current Crisis
Martin, Alberto - 2010
We explore a view of the crisis as a shock to investor sentiment that led to the collapse of a bubble or pyramid scheme in financial markets. We embed this view in a standard model of the financial accelerator and explore its empirical and policy implications. In particular, we show how the...
Persistent link: https://www.econbiz.de/10013137762
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Managing Credit Booms and Busts : A Pigouvian Taxation Approach
Jeanne, Olivier - 2010
We study a dynamic model in which the interaction between debt accumulation and asset prices magnifies credit booms and busts. We find that borrowers do not internalize these feedback effects and therefore suffer from excessively large booms and busts in both credit flows and asset prices. We...
Persistent link: https://www.econbiz.de/10013138082
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Bubbles, Fads, and Stock Price Volatility Tests : a Partial Evaluation
West, Kenneth D. - 2010
and Porter (1981) and Shiller (1981a). It appears that neither small sample bias, rational bubbles nor some standard …
Persistent link: https://www.econbiz.de/10013141042
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Speculative Betas
Hong, Harrison G. - 2012
We provide a model for why high beta assets are more prone to speculative overpricing than low beta ones. When investors disagree about the common factor of cash-flows, high beta assets are more sensitive to this macro-disagreement and experience a greater divergence-of-opinion about their...
Persistent link: https://www.econbiz.de/10013097774
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What Have They Been Thinking? Home Buyer Behavior in Hot and Cold Markets
Case, Karl E. - 2012
changing public understanding of speculative bubbles …
Persistent link: https://www.econbiz.de/10013100364