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Rational Asset Pricing Bubbles

Author

Listed:
  • Manuel S. Santos

    (Universidad Carlos III, Madrid)

  • Michael Woodford

    (University of Chicago)

Abstract

This paper provides a fairly systematic study of general economic conditions under which rational asset pricing bubbles may arise in an intertemporal competitive equilibrium framework. Our main results are concerned with nonexistence of asset pricing bubbles in those economies. These results imply that the conditions under which bubbles are possible --including some well-known examples of monetary equilibria-- are relatively fragile.

Suggested Citation

  • Manuel S. Santos & Michael Woodford, 1993. "Rational Asset Pricing Bubbles," Working Papers 9304, Centro de Investigacion Economica, ITAM.
    • Handle: RePEc:cie:wpaper:9304
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    References listed on IDEAS

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    6. Laurence Broze & Ariane Szafarz, 1991. "The Econometric Analysis of Non-Uniqueness in Rational Expectations Models," ULB Institutional Repository 2013/649, ULB -- Universite Libre de Bruxelles.
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