Economic theory and asset bubbles

Gadi Barlevy

Economic Perspectives, 2007, vol. 31, issue Q III, 44-59

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-liability management; Asset pricing (search for similar items in EconPapers)
Date: 2007
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