Money Is the Root of Asset Bubbles

This paper examines how monetary expansion causes asset bubbles. When there is no monetary expansion, a bubbly asset is not created due to a hold-up problem. Monetary expansion increases buyers' money holdings, and then, dealers are willing to buy a worthless asset from sellers, in hopes of selling it to buyers who may not know that it is worthless—a bubble now occurs.

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Year of publication:	2024
Authors:	Awaya, Yu ; Iwasaki, Kohei ; Watanabe, Makoto
Publisher:	Munich : Center for Economic Studies and ifo Institute (CESifo)
Subject:	bubbles \| dealers \| higher-order uncertainty \| money

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Series:	CESifo Working Paper ; 10923
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	1880360470 [GVK] RePec:ces:ceswps:_10923 [RePEc]
Classification:	D82 - Asymmetric and Private Information ; D83 - Search, Learning, Information and Knowledge ; D84 - Expectations; Speculations ; E44 - Financial Markets and the Macroeconomy ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; G12 - Asset Pricing ; G14 - Information and Market Efficiency; Event Studies
Source:	EconStor

Persistent link: https://www.econbiz.de/10014534470