This paper analyzes the possible inception of rational inflationary bubbles under the assumption that the empirically relevant environment precludes the existence of rational deflationary bubbles. The analysis shows that if a rational inflationary bubble exists, then it must have started on the...

This paper reports empirical tests for the existence of rational bubbles in stock prices. The analysis focuses on a familiar model that defines market fundamentals to be the expected present value of dividends, discounted at a constantrate, and defines a rational bubble to be a self-confirming...

A rational bubble would involve a self-confirming belief that an asset price depends on information that includes variables or parameters that are not part of market fundamentals. The existing literature shows that, if market fundamentals are economically interesting, i.e., forward looking, any...

This paper describes a theoretical and empirical study of the possibility of rational bubbles in the relative price ofgold. The critical implication of the theoretical analysis is that, if rational bubbles exist, the time series of the relative price of gold, as well as any time series obtained...

The solution to a linear model in which supply and/or demand depends on rational expectations of future prices can involve three parts, which we denote as the fundamental component, the deterministic bubble component, and the stochastic bubble component. This paper explores the properties of...

Why do sovereign states sometimes fail to settle territorial disputes peacefully? Also, why do even peaceful settlements of territorial disputes rarely call for the resulting border to be unfortified? This paper explores a class of answers to these questions that is based on the following...

Although most disputes between groups of people are settled peacefully, sometimes disputes result in war. This lecture uses historical examples to illustrate how the ability to negotiate a credible peaceful settlement of a dispute between sovereign states, typically a dispute over the control of...

Some polities are able to use constitutionally prescribed political processes to settle distributional disputes, whereas in other polities distributional disputes result in civil conflict. Theoretical analysis reveals that the following properties help to make it possible to design a...

The dispute that resulted in the secession of eleven Southern states from the Union and the ensuing Civil War proximately concerned the geographical expansion of slavery, but ultimately bore on the existence of the institution of slavery itself. This paper asks why in 1861 after seventy years of...