Zhou, Ge (2012): Rational equity bubbles. Forthcoming in:
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This paper discusses the existence of a bubble in the pricing of an asset that pays positive dividends. I show that rational bubbles can exist in a growing economy. The existence of bubbles depends on the relative magnitudes of risk aversion to consumption and to wealth. Furthermore, I examine how an exogenous shock in technology might trigger bubbles.
|Item Type:||MPRA Paper|
|Original Title:||Rational equity bubbles|
|Keywords:||bubbles, the spirit of capitalism, growth|
|Subjects:||E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E20 - General
|Depositing User:||Ge ZHOU|
|Date Deposited:||12. Jun 2012 13:41|
|Last Modified:||01. Mar 2013 16:48|
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