Real indeterminacy and dynamics of asset price bubbles in general equilibrium

Stefano Bosi, Cuong Le Van and Ngoc-Sang Pham

Journal of Mathematical Economics, 2022, vol. 100, issue C

Abstract: We show that both real indeterminacy and asset price bubble may appear in an infinite-horizon exchange economy with infinitely lived agents and an imperfect financial market. We explain how the asset structure and heterogeneity (in terms of preferences and endowments) affect the existence and the dynamics of asset price bubbles as well as the equilibrium indeterminacy. Moreover, this paper bridges the literature on bubbles in models with infinitely lived agents and that in overlapping generations models.

Keywords: Asset price bubble; Real indeterminacy; Borrowing constraint; Intertemporal equilibrium; Infinite-horizon (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Real indeterminacy and dynamics of asset price bubbles in general equilibrium (2022)
Working Paper: Real indeterminacy and dynamics of asset price bubbles in general equilibrium (2022)
Working Paper: Real indeterminacy and dynamics of asset price bubbles in general equilibrium (2022)
Working Paper: Real indeterminacy and dynamics of asset price bubbles in general equilibrium (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:100:y:2022:i:c:s0304406822000131

DOI: 10.1016/j.jmateco.2022.102651

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