Bubbles and Leverage: A Simple and Unified Approach

38 Pages Posted: 14 Dec 2013

See all articles by Robert Barsky

Robert Barsky

Research Department, Federal Reserve Bank of Chicago; University of Michigan at Ann Arbor - Department of Economics; National Bureau of Economic Research (NBER)

Theodore Bogusz

Federal Reserve Bank of Chicago

Date Written: November 30, 2013

Abstract

In this paper, we lay out a simple framework that captures much of what the theoretical literature has to say about the role of credit in systemically important asset booms and busts. In addition, we suggest ways in which to incorporate physical investment in the bubble asset as well as monetary policy.

Keywords: Asset Pricing, Heterogeneity, Bubbles

JEL Classification: G120, E52

Suggested Citation

Barsky, Robert B. and Bogusz, Theodore, Bubbles and Leverage: A Simple and Unified Approach (November 30, 2013). Available at SSRN: https://ssrn.com/abstract=2366942 or http://dx.doi.org/10.2139/ssrn.2366942

Robert B. Barsky (Contact Author)

Research Department, Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
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University of Michigan at Ann Arbor - Department of Economics ( email )

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734-764-9476 (Phone)
734-764-2769 (Fax)

National Bureau of Economic Research (NBER)

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Theodore Bogusz

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

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