Economic Theory and Asset Bubbles
16 Pages Posted: 11 Sep 2007
Abstract
The author summarizes what economic theory tells us about when asset price bubbles can occur and what the welfare implications are from bursting them. In some cases, bursting a bubble may make society worse off by exacerbating the market distortions that give rise to the bubble in the first place.
Keywords: asset price bubbles, General Financial Markets,
Suggested Citation: Suggested Citation
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