. We prove that temporary bubbles can exist in an economy which would experience under accumulation without money. We also … show, in an example, that cyclical bubbles and sunspot equilibria may occur. Finally, we prove that money creation has the … power to eliminate bubbles. …

Bubbles and money holding can reabsorb capital overaccumulation and restore the MGR in exogenous growth OLG economies …. In contrast, under productive externalities and endogenous growth, bubbles and monetary saving can worsen an already … inefficient underaccumulation. Under a simple credit market imperfection, we prove that bubbles can fluctuate around a bubbly …