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 …

and Porter (1981) and Shiller (1981a). It appears that neither small sample bias, rational bubbles nor some standard …

, including influential studies identifying price bubbles in periods of high volatility. Here we consider a model of the market … empirical tests of price behavior. In this model commodity price is equal to marginal consumption value, and hence bubbles as …

individuals, to explain bubbles, crises, and endogenous risk in financial markets …

. The theory predicts that asset prices carry a speculative premium that reflects the asset's marketability and depends on … anomalous. The theory also exhibits rational expectations equilibria with recurring belief driven events that resemble liquidity …

This paper reports empirical tests for the existence of rational bubbles in stock prices. The analysis focuses on a … extraneous variables. The tests are based on the theoretical result that, if rational bubbles exist, time series obtained by …. Applications of the time domain tests to simulated nonstationary time series that would be implied by rational bubbles indicates …

economically interesting, i.e., forward looking, any rational bubbles would be either explosive or implosive. Further arguments … the value of fiat money. These arguments rule out both positive and negative rational bubbles, except for the poissibility … of rational inflationary bubbles.This paper extends the theoretical analysis of rational bubbles in two ways. First, it …

There is a large and growing empirical literature that tests forthe existence of asset-price bubbles or quot …;sunspotquot; equilibria -- equilibria unrelated to market fundamentals. Our view is that even tests for non-stationary asset-price bubbles … ruling out nonstationary speculative price bubbles in models based on individual maximizing behavior. In the first part of …