Stock market participation and endogenous boom-bust dynamics

Noemi Schmitt and Frank Westerhoff

Economics Letters, 2016, vol. 148, issue C, 72-75

Abstract: We develop a model in which stock market participation depends on current market movements and on the fundamental state of the market. Our model explains empirical and experimental evidence according to which increasing (decreasing) stock market participation amplifies bubbles (crashes).

Keywords: Stock market participation; Bubbles and crashes; Evolutionary dynamics (search for similar items in EconPapers)
JEL-codes: D84 G12 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:148:y:2016:i:c:p:72-75

DOI: 10.1016/j.econlet.2016.09.016

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