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Unique Equilibria in Models of Rational Asset Price Bubbles

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  • Tomohiro Hirano
  • Alexis Akira Toda

Abstract

Existing models of rational pure bubble models feature multiple (and often a continuum of) equilibria, which makes model predictions and policy analysis non-robust. We show that when the interest rate in the fundamental equilibrium is below the economic growth rate ($R

Suggested Citation

  • Tomohiro Hirano & Alexis Akira Toda, 2023. "Unique Equilibria in Models of Rational Asset Price Bubbles," Papers 2303.05636, arXiv.org.
    • Handle: RePEc:arx:papers:2303.05636
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    References listed on IDEAS

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    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets

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