Queirós, Francisco - In: Theoretical economics : TE ; an open access journal in … 19 (2024) 1, pp. 325-364
This paper studies the interplay between asset bubbles and product market competition. It offers two main insights. The … rational bubbles possible even when there is no overaccumulation of capital. The second is that when providing a production … subsidy, bubbles stimulate competition and reduce monopoly rents. I show that bubbles can destroy efficient investment and …
