deterministic bubbles and stochastic bubbles, for a model of inflation and for a model of the evolution of price and quantity in the … market fora storable commodity, such as gold. The analysis focuses on stochastic bubbles as a possibility peculiarly … points to no compelling reason to rule out rational stochastic bubbles apriori, conventional behavioral assumptions imply …

This paper provides a guide to macroeconomic applications of the theory of rational bubbles. It shows that rational … bubbles can be easily incorporated into standard macroeconomic models, and illustrates how they can be used to account for … important macroeconomic phenomena. It also discusses the welfare implications of rational bubbles and the role of policy in …

these linked bubbles primarily focus on the irrationality of investor speculation and the corresponding stock price behavior … examine a broad cross‐section of security price data to evaluate the causes of the bubbles. Using newly collected stock prices … in 1720. Our findings are consistent with the hypothesis that financial bubbles require a plausible story to justify …

The recent theory of exchange rate dynamics within a target zone holds that exchange rates under a currency bard are … rational bubbles does not occur in the foreign exchange market. In this paper we consider instead a setup in which the … the presence of bubbles is viable if the Central Bank accommodates speculative attacks when the latter are consistent with …

We analyze the relationship between asset price bubbles and systemic risk, using bank-level data covering almost thirty … years. Systemic risk of banks rises already during a bubble’s build-up phase, and even more so during its bust. The increase …

This paper presents a stylized model of international trade and asset price bubbles. Its central insight is that … bubbles tend to appear and expand in countries where productivity is low relative to the rest of the world. These bubbles … productivity countries. Through this channel, bubbles act as substitute for international capital flows, improving the …

and Porter (1981) and Shiller (1981a). It appears that neither small sample bias, rational bubbles nor some standard …