This paper studies rational bubbles in non-linear dynamic general equilibrium models of the macroeconomy. The term … solution. Bubbles reflect self-fulfilling fluctuations in agents' expectations about future investment. In contrast to … explosive rational bubbles in linearized models (Blanchard (1979)), the rational bubbles in non-linear models here are bounded …

This paper studies rational bubbles in non-linear dynamic general equilibrium models of the macroeconomy. The term … solution. Bubbles reflect self-fulfilling fluctuations in agents' expectations about future investment. In contrast to … explosive rational bubbles in linearized models (Blanchard (1979)), the rational bubbles in non-linear models here are bounded …

This paper analyzes the boom–bust cycle driven by rational bubbles in an overlapping generations economy that is … rate. Bubbles are more likely to crowd investment in, the stronger is the intertemporal substitution in consumption, and … of dynamic efficiency and the occurrence of bubbles. We characterize the global dynamics of a stochastically bubbly …