We study the macroeconomic effects of rational asset bubbles in an overlapping-generations economy where asset trading … are large, the private gains associated with trading asset bubbles may lead too many workers to become speculators …, thereby causing rational bubbles to lose their efficiency properties. Moreover, if speculation can be carried out by skilled …

This paper examines whether theoretical models of bubbles based on the notion that the price of an asset can deviate … from its fundamental value are useful for understanding phenomena that are often described as bubbles, and which are … trading would emerge. In addition, I show that these models imply that speculative bubbles can be associated with low rather …