We develop a parsimonious model of bubbles based on the assumption of imprecisely known market depth. In a speculative … possibility of bubbles depending on the risk-free rate, uncertainty about market depth, and traders’ degree of leverage. This … allows us to discuss several policy measures. Bubbles always reduce aggregate welfare. Among others, certain monetary policy …

We develop a model of rational bubbles based on the assumptions of unknown market liquidity and limited liability of … condition for whether rational bubbles are possible. Based on this analysis, we discuss several widely-discussed policy measures … with respect to their effectiveness in preventing bubbles. A reduction of manager bonuses or a Tobin tax can create or …

-stamp bubbles in the emerging and frontier African stock markets. We find periods of explosive behavior in the price–dividend ratio … in several markets which is indicative of irrational exuberance. We find strong evidence of multiple speculative bubbles …

bubbles in Chinese house price cycles. Overall, we find that except for 2009–2010 actual house prices are not significantly … disconnected from fundamentals. Thus, the evidence for speculative house price bubbles in China is in general weak …

speculative bubbles and/or noise trading behavior. Our empirical findings for the US stock market covering the 1871:1 - 2000 …

and fiscal policy on the occurrence of bubbles, the introduction of a probability of market crash and the effect of … bubbles on income inequality …

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 …

This paper develops a general equilibrium model to examine the quantitative effects of speculative bubbles on capital … late 1990s. The welfare cost of speculative bubbles depends crucially on parameter values. Bubbles can improve welfare if …, the welfare cost of bubbles is large, typically exceeding one percent of annual consumption …

This paper develops an equilibrium model of speculative bubbles that can be used to explore the role of various … policies in either giving rise to or eliminating the possibility of asset bubbles, e.g. restricting the use of certain types of …

We introduce a model of super-exponential financial bubbles with two assets (risky and risk-free), in which …