We develop a parsimonious model of bubbles based on the assumption of imprecisely known market depth. In a speculative … possibility of bubbles depending on the risk-free rate, uncertainty about market depth, and traders’ degree of leverage. This … allows us to discuss several policy measures. Bubbles always reduce aggregate welfare. Among others, certain monetary policy …

Reviewing the definition and measurement of speculative bubbles in context of contagion, this paper analyses the DotCom …. Even it is astonishing, that the contagion is lower during price bubbles, the main finding indicates the presence of …

is able to account for the development of endogenous bubbles and crashes. We distinguish three different regimes …’ opinions are idiosyncratic and no bubbles emerge. Around the critical value of the O(n) vector model, cross sectionally … asynchronous bubbles emerge. Above the critical value, small random price fluctuations may be amplified by noise traders herding …

) during financial bubbles. The SIN is constructed in two steps. First, we develop a Hidden Markov Model (HMM) of regime …

-selling constraints, speculation can generate overvaluation and speculative bubbles. Leverage can substantially inflate speculative …I review the literature on financial speculation driven by belief disagreements from a macroeconomics perspective. To … bubbles and leverage limits depend on perceived downside risks. Shifts in beliefs about downside tail scenarios can explain …

bubbles continue to threaten economic stability despite financial markets becoming more informationally-efficient, more …