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Another Look at the Boom and Bust of Financial Bubbles
| Content Provider | Semantic Scholar |
|---|---|
| Author | Beccarini, Andrea |
| Copyright Year | 2015 |
| Abstract | A rational bubble is explained through the covariance between the marginal rate of substitution and the future price. Surprisingly, in the present liter- ature, this quantity has always been set equal to zero either because of a first-order Taylor approximation, or because of a risk-neutrality assumption. One first shows that the intrinsic bubble of Froot and Obstfeld (1991) is a re-parameterization of the quantity in question. One then shows how this quantity depends on economic shocks after introducing a Taylor rule-based monetary policy. Some empirical evidence is also presented. |
| Starting Page | 417 |
| Ending Page | 423 |
| Page Count | 7 |
| File Format | PDF HTM / HTML |
| Volume Number | 16 |
| Alternate Webpage(s) | http://down.aefweb.net/AefArticles/aef160209Beccarini.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
