Bubbles are usually viewed as a threat to financial stability. This paper takes a more nuanced view. The world economy … rate of the economy g. As is well-known, rational bubbles are sustainable when r ≤ g in a steady-state equilibrium. Bubbles … can then implement a dynamically efficient equilibrium. We show that from a structural point of view, bubbles, Pay …

In this paper we develop a well-established financial model to investigate whether bubbles were present in opinion … approach is theoretically elegant. Thus, where bubbles are found we suggest a suitable adjustment. We find evidence of bubbles …