This paper develops a general equilibrium model to examine the quantitative effects of speculative bubbles on capital … technology, investment and consumption booms, and faster trend growth, reminiscent of the U.S. economy during the late 1920s and … late 1990s. The welfare cost of speculative bubbles depends crucially on parameter values. Bubbles can improve welfare if …

of perverse incentives and moral hazard that often gives rise to yet another round of bubbles. The US central bank …'s current premise is that policymakers cannot and should not target asset bubbles. However, the housing story has rendered … untenable the prevailing belief that bubbles are impossible to spot ahead of time. The warning signals were ubiquitous - for …

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 …"This paper develops an equilibrium model of speculative bubbles that can be used to explore the role of various …