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Asset bubbles, credit market imperfections, and technology choice

Author

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  • Matsuoka, Tarishi
  • Shibata, Akihisa

Abstract

This paper introduces a bubbly asset into the Matsuyama (2007) model with credit market imperfections and multiple technologies and shows that there can exist multiple bubbly steady states and bubbles may cause underdevelopment traps by preventing the adoption of high productivity technology.

Suggested Citation

  • Matsuoka, Tarishi & Shibata, Akihisa, 2012. "Asset bubbles, credit market imperfections, and technology choice," Economics Letters, Elsevier, vol. 116(1), pages 52-55.
  • Handle: RePEc:eee:ecolet:v:116:y:2012:i:1:p:52-55
    DOI: 10.1016/j.econlet.2012.01.009
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    References listed on IDEAS

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    1. Kunieda, Takuma, 2008. "Asset bubbles and borrowing constraints," Journal of Mathematical Economics, Elsevier, vol. 44(2), pages 112-131, January.
    2. Emmanuel Farhi & Jean Tirole, 2012. "Bubbly Liquidity," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 678-706.
    3. Alberto Martin & Jaume Ventura, 2012. "Economic Growth with Bubbles," American Economic Review, American Economic Association, vol. 102(6), pages 3033-3058, October.
    4. Tirole, Jean, 1985. "Asset Bubbles and Overlapping Generations," Econometrica, Econometric Society, vol. 53(6), pages 1499-1528, November.
    5. Gokan, Yoichi, 2011. "Poverty traps, the money growth rule, and the stage of financial development," Journal of Economic Dynamics and Control, Elsevier, vol. 35(8), pages 1273-1287, August.
    6. Kiminori Matsuyama, 2007. "Credit Traps and Credit Cycles," American Economic Review, American Economic Association, vol. 97(1), pages 503-516, March.
    7. Hirano, Tomohiro & Inaba, Masaru, 2010. "Asset Price Bubbles in the Kiyotaki-Moore Model," MPRA Paper 36632, University Library of Munich, Germany.
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    Citations

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    Cited by:

    1. Kunieda, Takuma, 2014. "A note on the crowd-in effect of asset bubbles in the perpetual youth model," Mathematical Social Sciences, Elsevier, vol. 72(C), pages 50-54.
    2. Kunieda, Takuma & Shibata, Akihisa, 2012. "Asset bubbles, economic growth, and a self-fulfilling financial crisis: a dynamic general equilibrium model of infinitely lived heterogeneous agents," MPRA Paper 37309, University Library of Munich, Germany.
    3. Takuma Kunieda & Tarishi Matsuoka & Akihisa Shibata, 2017. "Asset Bubbles, Technology Choice, and Financial Crises," Discussion Paper Series 157, School of Economics, Kwansei Gakuin University, revised Feb 2017.
    4. Takuma Kunieda & Ken-ichi Hashimoto & Ryonghun Im, 2017. "Asset Bubbles, Unemployment, and a Financial Crisis," Discussion Paper Series 156, School of Economics, Kwansei Gakuin University, revised Feb 2017.
    5. Mathieu Boullot, 2017. "Secular Stagnation, Liquidity Trap and Rational Asset Price Bubbles," Working Papers halshs-01295012, HAL.

    More about this item

    Keywords

    Asset bubbles; Credit market imperfections; Technology adoption;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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