Economic theory and asset bubbles
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.
Volume (Year): (2007)
Issue (Month): Q III ()
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References listed on IDEAS
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"Assessing Dynamic Efficiency: Theory and Evidence,"
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- Timothy Cogley, 1999. "Should the Fed take deliberate steps to deflate asset price bubbles?," Economic Review, Federal Reserve Bank of San Francisco, pages 42-52. Full references (including those not matched with items on IDEAS)