reswitching activities and short-term thinking of bounded rational investors. Negative bubbles (market prices lower than … fundamentals) tend to occur if active portfolio managers exhibit high risk aversion, but are less frequent than positive bubbles. …

This paper proposes and tests a theory of credit-driven asset bubbles which are neutral in their real effects. When a … asset bubbles can form which exactly offset a bubble in household liabilities. Surprisingly, evidence from a VAR using long …-run restrictions supports the idea that asset bubbles are approximately neutral in their real effects before 2007. The evidence becomes …

Bubbles in asset markets have been documented in numerous experimental studies. However, all experiments in which … bubbles occur pay dividends after each trading day. In this paper we study whether bubbles can occur in markets without … may have inside information, and (2) the option to communicate with other traders. We find that bubbles can indeed occur …

annual US stock price data from 1871 until 2003. The estimation results support the existence of two expectation regimes. One …

that Fed policy remained stable, there was not much of attention to asset bubbles. For the Euro Area, historically, the …

speculative bubbles and/or noise trading behavior. Our empirical findings for the US stock market covering the 1871:1 - 2000 …

This paper develops an equilibrium model of speculative bubbles that can be used to explore the role of various … policies in either giving rise to or eliminating the possibility of asset bubbles, e.g. restricting the use of certain types of …

straightforward channels. The result is a macroeconomic model that allows for the endogenous development of stock price bubbles. Even …