Living with a Monetary System infected by Bubbles
I study the real effects of bubbles in a price-settingenvironment. Bubbles cause price dispersion and overinvestment in assets that are overvalued. And when they pop some goods are not sold and capacity is not fully utilized. I argue that a government monopoly on the creation of bubble assets is desirable but may be difficult to achieve. A non-linear tax on capital gains and a 'high' interest rate policy can play a role in protecting the governmentï¿½s monopoly on the creation of bubble assets.
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- Boyan Jovanovic, 2013.
"Bubbles In Prices Of Exhaustible Resources,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(1), pages 1-34, 02.
- Jovanovic, Boyan, 2008. "Bubbles In Prices Of Exhaustible Resources," Working Papers 45830, American Association of Wine Economists.
- Boyan Jovanovic, 2007. "Bubbles in Prices of Exhaustible Resources," Levine's Working Paper Archive 122247000000001414, David K. Levine.
- Boyan Jovanovic, 2008. "Bubbles in Prices of Exhaustible Resources," 2008 Meeting Papers 26, Society for Economic Dynamics.
- Boyan Jovanovic, 2007. "Bubbles in Prices of Exhaustible Resources," NBER Working Papers 13320, National Bureau of Economic Research, Inc.
- Eden, Benjamin, 1990. "Marginal Cost Pricing When Spot Markets Are Complete," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1293-1306, December.
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