introduced in the first volume to a more technical level. Where volume I provided an introduction to the mathematics of bubbles …Chapter1 Asset price dynamics and stochastic processes -- Chapter2 Stylized facts of financial markets and bubbles … -- Chapter3 Introduction to contagions and bubbles -- Chapter4 Rational Social Learning -- Chapter5 Bubbles -- Chapter6 …

This paper investigates the nature and the presence of bubbles in financial markets. Are bubbles consistent with … are some of the questions asked in the first three sections. The general conclusion is that bubbles, in many markets, are … consistent with rationality, that phenomena such as runaway asset prices and market crashes are consistent with rational bubbles …

-selling constraints, speculation can generate over- valuation and speculative bubbles. Leverage can substantially inflate speculative … bubbles and leverage limits depend on perceived downside risks. Shifts in beliefs about downside tail scenarios can explain … the emergence and the collapse of leveraged speculative bubbles. Speculative bubbles are related to rational bubbles, but …

Economists broadly define financial asset price bubbles as episodes in which prices rise with notable rapidity and … attempted to study and interpret bubbles through the prisms of rational expectations, efficient markets, and equilibrium … that explains how and why bubbles (and crashes) evolve and can also be defined, measured, and compared. This book develops …

is presented that helps explain why this is the case for traditional currency crises, but less so for asset bubbles. The …1. Overview: A Framework for Investing During Currency Crises and Asset Bubbles -- 2. Bretton Woods’ Collapse Alters …

Asset bubbles and contagion have had a profound effect on the financial markets after the financial and sovereign debt …

We develop a stylized model of economic growth with bubbles. In this model, financial frictions lead to equilibrium … dispersion in the rates of return to investment. During bubbly episodes, unproductive investors demand bubbles while productive … dynamically inefficient: otherwise, there would be no demand for bubbles. This dynamic inefficiency, however, might be generated …

supporting the resale option theory of bubbles: investors overpay for a warrant hoping to resell it at an even higher price to a …