. There is no uncertainty about economic fundamentals. Banking bubbles can emerge through a positive feedback loop mechanism …. Changes in household confidence can cause the collapse of bubbles, resulting in a financial crisis. Credit policy can mitigate … economic downturns but also incur an efficiency loss. Bank capital requirements can prevent the formation of banking bubbles by …

individuals, to explain bubbles, crises, and endogenous risk in financial markets …

-sales constraints, that this is where the similarity ends. Equity bubbles are loud: price and volume go together as investors speculate … payoff is bounded. Debt bubbles then require an optimism bias among investors. But greater optimism leads to less speculative … trading as investors view the debt as safe and having limited upside. Debt bubbles are hence quiet--high price comes with low …

. The theory predicts that asset prices carry a speculative premium that reflects the asset's marketability and depends on … anomalous. The theory also exhibits rational expectations equilibria with recurring belief driven events that resemble liquidity …

The efficiency of financial markets, but also their potential to produce bubbles are central topics in academic and … inflows or high initial capital supply - are susceptible to bubbles, although they are more efficient than student markets. In … mixed markets with students, bubbles also occur, but professionals act as price stabilizers. We show that heterogeneous …

This paper studies an equilibrium model with heterogeneous agents, asset price bubbles, and trading constraints. Market … liquidity is modeled as a stochastic quantity impact from trading on the price. Bubbles are larger in liquid markets and when …

nancial bubbles generated in the banking sector and to mitigate the adverse effects of fi nancial repression after a bubble …