![NBER WORKING PAPER SERIES BOOM-BUSTS IN ASSET PRICES, ECONOMIC INSTABILITY,](http://s1.studyres.com/store/data/008232307_1-36411f39eb9a9d205e92180b41cd6ba9-300x300.png)
NBER WORKING PAPER SERIES BOOM-BUSTS IN ASSET PRICES, ECONOMIC INSTABILITY,
... the countries and whether one looks at stock or property prices. Boom-bust episodes seem to be more frequent in real property prices than in stock prices, and in small countries than in large countries. However, two dramatic episodes (the US in the Great Depression and Japan in the 1990s) have invol ...
... the countries and whether one looks at stock or property prices. Boom-bust episodes seem to be more frequent in real property prices than in stock prices, and in small countries than in large countries. However, two dramatic episodes (the US in the Great Depression and Japan in the 1990s) have invol ...
The Zero Bound on Interest Rates and Optimal Monetary Policy
... framework to allow for fiscal tools would seem to provide a good starting point. Finally, it is important to recognize that malperformance of credit markets is a key feature of economies truly enmeshed in a liquidity trap, such as the U.S. economy during the Great Depression and the current Japanese ...
... framework to allow for fiscal tools would seem to provide a good starting point. Finally, it is important to recognize that malperformance of credit markets is a key feature of economies truly enmeshed in a liquidity trap, such as the U.S. economy during the Great Depression and the current Japanese ...
Pick your moment - Journalism.co.za
... But determining "value" is the trick. It is not an easy process and can be undermined by wrong assumptions. Professional fund managers' views are based on reasoned assumptions, however, and there is no reason why informed private investors cannot do the same. At the heart of determining value is the ...
... But determining "value" is the trick. It is not an easy process and can be undermined by wrong assumptions. Professional fund managers' views are based on reasoned assumptions, however, and there is no reason why informed private investors cannot do the same. At the heart of determining value is the ...
REAL%THEORY%OF%THE%PRICE%LEVEL% Background%
... their bond yields. Eurozone nations issue debt in euro, but the quantity of euro is controlled by the European Central Bank rather than individual member nations. To those countries, their debt issuances are effectively real, demanding real (tax) backing. When the backing is not assured, default pro ...
... their bond yields. Eurozone nations issue debt in euro, but the quantity of euro is controlled by the European Central Bank rather than individual member nations. To those countries, their debt issuances are effectively real, demanding real (tax) backing. When the backing is not assured, default pro ...
Lecture 3a
... real (purchasing power) values. • Nominal values are price-weighted measures of goods and services. Nominal values increase and decrease as prices rise and fall, respectively. In the base year (period) of a price index, the nominal value equals the real value. • Real values are nominal values adjust ...
... real (purchasing power) values. • Nominal values are price-weighted measures of goods and services. Nominal values increase and decrease as prices rise and fall, respectively. In the base year (period) of a price index, the nominal value equals the real value. • Real values are nominal values adjust ...
The Asset Market, Money, and Prices
... • The asset market is the entire set of markets in which people buy and sell real and financial assets, for example, gold, houses, stocks and bonds. • Money is an asset widely used and accepted as payment. • Money has long been believed to have special significance. • The market for money is importa ...
... • The asset market is the entire set of markets in which people buy and sell real and financial assets, for example, gold, houses, stocks and bonds. • Money is an asset widely used and accepted as payment. • Money has long been believed to have special significance. • The market for money is importa ...
Ch. 2. Asset Pricing Theory (721383S)
... This chapter introduces the modern asset pricing theory based on the stochastic discount factor approach. The main idea is that asset prices should be equal to discounted expected payo¤. I start reviewing the main concepts related to expected utility and risk aversion. Indeed, the expected utility p ...
... This chapter introduces the modern asset pricing theory based on the stochastic discount factor approach. The main idea is that asset prices should be equal to discounted expected payo¤. I start reviewing the main concepts related to expected utility and risk aversion. Indeed, the expected utility p ...
NBER WORKING PAPER SERIES SPECULATIVE GROWTH Ricardo J. Caballero Mohamad L. Hammour
... notion that the emergence of a bubble would crowd out investment, while its bursting would increase investment, is contrary to the patterns depicted in figure 1. Moreover, empirical testing of “dynamic inefficiency” has been negative. Abel et al. (1989) tested an implication of dynamic inefficiency, ...
... notion that the emergence of a bubble would crowd out investment, while its bursting would increase investment, is contrary to the patterns depicted in figure 1. Moreover, empirical testing of “dynamic inefficiency” has been negative. Abel et al. (1989) tested an implication of dynamic inefficiency, ...
Steve Earley, King`s College, Madrid
... • C A change in the average price level is not the only factor that can impact on aggregate supply decisions in the short-run. • C Whilst alterations to the quantity, quality and organisation of resources are not possible it is still conceivable that the costs of the factors of production could chan ...
... • C A change in the average price level is not the only factor that can impact on aggregate supply decisions in the short-run. • C Whilst alterations to the quantity, quality and organisation of resources are not possible it is still conceivable that the costs of the factors of production could chan ...
Quantitative Easing
... b. Financial segmentation channel: Policy-induced changes in the money supply may primarily benefit those groups of agents who directly interact with the central bank or who participate in financial markets more frequently. This idea goes back to pre-classical economist Richard Cantillon (b. 1680, d ...
... b. Financial segmentation channel: Policy-induced changes in the money supply may primarily benefit those groups of agents who directly interact with the central bank or who participate in financial markets more frequently. This idea goes back to pre-classical economist Richard Cantillon (b. 1680, d ...
Monetary Transmission Mechanism Through an Expectation
... • Mark Carney, the BOE’s governor, says, “One reason might be that in Britain, many people who might have retired saw their wealth shrivel up during the crisis and had to keep working” ...
... • Mark Carney, the BOE’s governor, says, “One reason might be that in Britain, many people who might have retired saw their wealth shrivel up during the crisis and had to keep working” ...
PAPER SERIES
... windfall gain on the holders of existing assets. On the other hand, measures that subsidize only new capital may well actually reduce the wealth of owners of the existing capital ...
... windfall gain on the holders of existing assets. On the other hand, measures that subsidize only new capital may well actually reduce the wealth of owners of the existing capital ...
Slide 1
... Despite lower interest rates and increased demand for investment, banks may be unwilling to make the loans necessary for the investment purchases This leads to a break down in the transmission mechanism If banks made prior bad loans that are not repaid, they may become reluctant to make more, despit ...
... Despite lower interest rates and increased demand for investment, banks may be unwilling to make the loans necessary for the investment purchases This leads to a break down in the transmission mechanism If banks made prior bad loans that are not repaid, they may become reluctant to make more, despit ...
Krugman`s Chapter 31 PPT
... A common mistake is to imagine that these changes in the way the Federal Reserve operates alter the way the money market works. You’ll sometimes hear people say that the interest rate no longer reflects the supply and demand for money because the Fed sets the interest rate. In fact, the money market ...
... A common mistake is to imagine that these changes in the way the Federal Reserve operates alter the way the money market works. You’ll sometimes hear people say that the interest rate no longer reflects the supply and demand for money because the Fed sets the interest rate. In fact, the money market ...
Slides - FGV/EPGE
... In order to affect aggregate demand, central bank must stabilize prices in flexible price sector ...
... In order to affect aggregate demand, central bank must stabilize prices in flexible price sector ...
Uber Revolution Pack Summit Keynote Address
... Partners, Really? …packaging Procurement will need to become less adversarial …and transparent data sharing will drive inefficient providers out ...
... Partners, Really? …packaging Procurement will need to become less adversarial …and transparent data sharing will drive inefficient providers out ...
speculative activities in the financial markets and its
... The term speculation is defined as the forming of a theory or conjecture without firm evidence or as an investment in stocks, property in the hope of gain but with the risk of loss (Oxford Dictionaries, 2014). There are at least two different views on the existence of speculation in the financial ma ...
... The term speculation is defined as the forming of a theory or conjecture without firm evidence or as an investment in stocks, property in the hope of gain but with the risk of loss (Oxford Dictionaries, 2014). There are at least two different views on the existence of speculation in the financial ma ...
Monetary Policy and Asset Prices: When Cleaning
... (2000), Gerlach and Lewis (2010)). We argue that, if interest rates reach the ZLB due to disruptions on financial markets, a policy alternative may exist that is diametrically opposed to this mainstream view. The mere possibility that the ZLB could be binding after a financial crisis may render a po ...
... (2000), Gerlach and Lewis (2010)). We argue that, if interest rates reach the ZLB due to disruptions on financial markets, a policy alternative may exist that is diametrically opposed to this mainstream view. The mere possibility that the ZLB could be binding after a financial crisis may render a po ...
universal basic assets - Institute for the Future
... public mission. They were expected to develop large commercial ventures like roads, canals, railroads, and educational institutions. (Harvard was the first chartered corporation in the US.). Importantly, investors in these early corporations were usually also their customers. Companies were cre ...
... public mission. They were expected to develop large commercial ventures like roads, canals, railroads, and educational institutions. (Harvard was the first chartered corporation in the US.). Importantly, investors in these early corporations were usually also their customers. Companies were cre ...
Market and Public Liquidity
... are risky and expose their holders to both maturity and return risk. The other assets are riskless. There are gains from trade between LR and SR investors when the risky asset matures late. In this case SR investors prefer to sell the asset to LR investors as long as the price is at least as high as ...
... are risky and expose their holders to both maturity and return risk. The other assets are riskless. There are gains from trade between LR and SR investors when the risky asset matures late. In this case SR investors prefer to sell the asset to LR investors as long as the price is at least as high as ...
micro
... increase in the price of coffee, then at least some buyers of coffee will react to the higher price by reducing the amount of coffee they drink or by substituting some other drink. If the demand for fresh fruits and vegetables increases, causing the price to rise, then at least some suppliers will r ...
... increase in the price of coffee, then at least some buyers of coffee will react to the higher price by reducing the amount of coffee they drink or by substituting some other drink. If the demand for fresh fruits and vegetables increases, causing the price to rise, then at least some suppliers will r ...
Microeconomic Concepts
... increase in the price of coffee, then at least some buyers of coffee will react to the higher price by reducing the amount of coffee they drink or by substituting some other drink. If the demand for fresh fruits and vegetables increases, causing the price to rise, then at least some suppliers will r ...
... increase in the price of coffee, then at least some buyers of coffee will react to the higher price by reducing the amount of coffee they drink or by substituting some other drink. If the demand for fresh fruits and vegetables increases, causing the price to rise, then at least some suppliers will r ...
GEORGIA PERFORMANCE STANDARDS
... increase in the price of coffee, then at least some buyers of coffee will react to the higher price by reducing the amount of coffee they drink or by substituting some other drink. If the demand for fresh fruits and vegetables increases, causing the price to rise, then at least some suppliers will r ...
... increase in the price of coffee, then at least some buyers of coffee will react to the higher price by reducing the amount of coffee they drink or by substituting some other drink. If the demand for fresh fruits and vegetables increases, causing the price to rise, then at least some suppliers will r ...
Economic bubble
![](https://commons.wikimedia.org/wiki/Special:FilePath/South_Sea_Bubble_Cards-Tree.png?width=300)
An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is trade in an asset at a price or price range that strongly deviates from the corresponding asset's intrinsic value. It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future.Because it is often difficult to observe intrinsic values in real-life markets, bubbles are often conclusively identified only in retrospect, when a sudden drop in prices appears. Such a drop is known as a crash or a bubble burst. Both the boom and the burst phases of the bubble are examples of a positive feedback mechanism, in contrast to the negative feedback mechanism that determines the equilibrium price under normal market circumstances. Prices in an economic bubble can fluctuate erratically, and become impossible to predict from supply and demand alone.While some economists deny that bubbles occur, the cause of bubbles remains disputed by those who are convinced that asset prices often deviate strongly from intrinsic values. Many explanations have been suggested, and research has recently shown that bubbles may appear even without uncertainty, speculation, or bounded rationality. In such cases, the bubbles may be argued to be rational, where investors at every point fully compensated for the possibility that the bubble might collapse by higher returns. These approaches require that the timing of the bubble collapse can only be forecast probabilistically and the bubble process is often modelled using a Markov switching model. It has also been suggested that bubbles might ultimately be caused by processes of price coordination or emerging social norms.