Asset Price Bubbles: A Survey
University of California, Davis - Graduate School of Management
Board of Governors of the Federal Reserve System
December 13, 2011
Why do asset price bubbles continue to appear in various markets? What types of events give rise to bubbles and why do arbitrage forces fail to quickly burst them? Do bubbles have real economic consequences and should policy makers do more to prevent them? This paper provides an overview of recent literature on bubbles, with significant attention given to behavioral models and rational models with frictions. The latest U.S. housing bubble is described in the context of this literature.
Number of Pages in PDF File: 43
Keywords: Bubbles, Limits to Arbitrage, Financial Crisis
JEL Classification: G00, G01, G10working papers series
Date posted: March 28, 2011 ; Last revised: February 3, 2013
© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo8 in 0.360 seconds