Asset Price Bubbles; A Selective Survey

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 rational models, the new literature is able to model the common characteristics of historical bubble episodes and offer insights for how bubbles are initiated and sustained, the reasons they burst, and why arbitrage forces do not routinely step in to squash them. The latest U.S. real estate bubble is described in the context of this literature.

MoreLess

Year of publication:	2013-02-21
Authors:	Scherbina, Anna
Institutions:	International Monetary Fund (IMF)
Subject:	Asset prices \| Business cycles \| Investment \| Economic models \| stock market \| discount rate \| mortgage \| cash flows \| financial economics \| bond \| stock prices \| overvaluation \| asset markets \| future cash flows \| hedge \| present value \| bonds \| stock returns \| moral hazard \| stock market crash \| hedge funds \| financial stability \| financial markets \| real discount rate \| mortgage payment \| mortgage payments \| bond ratings \| derivative contract \| mortgage rates \| mortgage-backed securities \| mortgage loan \| mortgages \| discounted cash flows \| stock value \| financial innovation \| mortgage loans \| hedging \| stockholders \| corporate bonds \| mortgage lenders \| stock market bubbles \| financial sector \| financial liberalization \| housing construction \| housing supply \| hedge fund managers \| asset bubbles

More details

Extent:	application/pdf
Series:	IMF Working Papers.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series IMF Working Papers Number 13/45 4 pages long
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011242201