I study heterogeneous beliefs speculative bubbles in a setup in which information flow is endogenous and is determined … by real investment. My main results are on welfare implications of bubbles. During the periods of major technological … modeling heterogeneous beliefs bubbles. I consider a model in which disagreements are small and short-lived and then a limiting …

economic theory, the answers is no. The wealth of a society consists of its real assets that produce consumable goods and …

-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 …

Why do asset price bubbles continue to appear in various markets? This paper provides an overview of recent literature … on bubbles, with significant attention given to behavioral models and rational models with frictions. Unlike the standard … insights for how bubbles are initiated and sustained, the reasons they burst, and why arbitrage forces do not routinely step in …

Why do asset price bubbles continue to appear in various markets? What types of events give rise to bubbles and why do … arbitrage forces fail to quickly burst them? Do bubbles have real economic consequences and should policy makers do more to … prevent them? This paper provides an overview of recent literature on bubbles, with significant attention given to behavioral …

We propose an extension of the class of rational expectations bubbles (REBs) to the more general rational beliefs … speculation. Accounting for the fact that market efficiency has an intrinsic time dimension, we show that diverse but correlated … beliefs can thus account for speculative bubbles, without the need for irrational agents or limits to arbitrage. Many of the …