We develop a model of rational bubbles based on leverage and the assumption of an imprecisely known maximum market size … lend to traders with limited liability in a bubble is endogenous. Bubbles reduce welfare of future investors. We provide … general conditions for the possibility of bubbles depending on uncertainty about market size, traders' degree of leverage and …

-price dynamics to diagnose financial bubbles by providing three main innovations. First, we introduce the quantile regression to the …\textsuperscript{TM} and Trust\textsuperscript{TM} indicators that enrich considerably the diagnostic of bubbles. Using extensive synthetic … signals, a detailed analysis of the "S\&P 500 1987" bubble and the application to 16 historical bubbles, we show that the …

crash (and rally) discrete jump distributions associated with positive (and negative) bubbles. We assume that crashes tend …, which has been previously proposed as a general definition of bubbles. Our bubble model also allows for a sequence of small …

(and rally) discrete jump distributions associated with positive (and negative) bubbles. The RE condition implies that the …

financial crisis. The effect of bubbles on stock and housing markets and their transmission to the domestic real economy and the …

Building on the notion that bubbles are transient self-fulfilling prophecies created by positive feedback mechanisms …

Financial bubbles are subject to debate and controversy. However, they are not well understood and are hardly ever … specific traces, bubbles may be recognised in advance: that is, before they burst. In this paper, we will explain the mechanism … behind financial bubbles in an intuitive way. We will show how the log-periodic power law emerges spontaneously from the …

Chapter Summary: We consider the recent financial crisis as an overlapping sequence of interdependent financial bubbles …

) model of endogenous asset price bubbles to monitor crash risk. The model is calibrated to 15 years market history for five …

It is well known that rational bubbles can be sustained in balanced growth path of a deterministic economy when the … return to capital r is equal to the growth rate g. When there is a lack of stores of value, bubbles can implement an … capital. Then, bubbles further efficiency, though they cannot implement first best. While bubbles can only be sustained when r …