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Classic models of fire-sales that emphasize liquidity-constrained natural buyers can-notfully account for the asset fire-sales during the Financial Crisis of 2008. I present a modelto demonstrate that fire-sales may happen even when there is a sizable pool of naturalbuyers and in the absence of...
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, thereby causing rational bubbles to lose their efficiency properties. Moreover, if speculation can be carried out by skilled … inequalities. -- Rational bubbles ; occupational choice ; dynamic efficiency …
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