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Speculation, Trading and Bubbles Third Annual Arrow Lecture

Author

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  • Jose A. Scheinkman

    (Princeton University and NBER)

Abstract

The history of financial markets is strewed with periods in which asset prices seem to vastly exceed fundamentals - events commonly called bubbles. Nonetheless, there is very little agreement among economists on what are the economic forces that generate such occurrences. Numerous academic papers and books have been written explaining why the prices attained in a particular episode can be justifed by economic actors rationally discounting future streams of payoffs. Some proponents of efficient-markets even deny that one can attach any meaning to bubbles.

Suggested Citation

  • Jose A. Scheinkman, 2013. "Speculation, Trading and Bubbles Third Annual Arrow Lecture," Working Papers 1458, Princeton University, Department of Economics, Econometric Research Program..
    • Handle: RePEc:pri:metric:wp050_2013-revised_scheinkman_speculation-trading-and-bubbles.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Robert A. Jarrow, 2015. "Asset Price Bubbles," Annual Review of Financial Economics, Annual Reviews, vol. 7(1), pages 201-218, December.
    2. Raurich, Xavier & Seegmuller, Thomas, 2019. "On the interplay between speculative bubbles and productive investment," European Economic Review, Elsevier, vol. 111(C), pages 400-420.
    3. John M. Griffin & Amin Shams, 2020. "Is Bitcoin Really Untethered?," Journal of Finance, American Finance Association, vol. 75(4), pages 1913-1964, August.
    4. Gian Maria Tomat, 2020. "Present Value Models and the Behaviour of European Financial Markets," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 6(3), pages 493-520, November.
    5. Ricardo Lagos & Shengxing Zhang, 2019. "A Monetary Model of Bilateral Over-the-Counter Markets," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 33, pages 205-227, July.
    6. Xinyun Chen & Yan Liu & Tao Zeng, 2017. "Does the T + 1 rule really reduce speculation? Evidence from Chinese Stock Index ETF," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 57(5), pages 1287-1313, December.

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    More about this item

    Keywords

    asset prices; financial market history;

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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