Economic growth with bubbles
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- dc.contributor.author Martin, Alberto, 1974-ca
- dc.contributor.author Ventura, Jaumeca
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2017-07-26T10:50:49Z
- dc.date.available 2017-07-26T10:50:49Z
- dc.date.issued 2003-11-01
- dc.date.modified 2017-07-23T02:09:25Z
- dc.description.abstract We develop a stylized model of economic growth with bubbles. In this model, changes in investor sentiment lead to the appearance and collapse of macroeconomic bubbles or pyramid schemes. We show how these bubbles mitigate the effects of financial frictions. During bubbly episodes, unproductive investors demand bubbles while productive investors supply them. These transfers of resources improve the efficiency at which the economy operates, expanding consumption, the capital stock and output. When bubbly episodes end, these transfers stop and consumption, the capital stock and output contract. We characterize the stochastic equilibria of the model and argue that they provide a natural way of introducing bubble shocks into business cycle models.
- dc.format.mimetype application/pdfca
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=848
- dc.identifier.citation American Economic Review, 102 (6), 3033-3058, October 2012
- dc.identifier.uri http://hdl.handle.net/10230/1236
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 848
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword bubbles
- dc.subject.keyword dynamic inefficiency
- dc.subject.keyword economic growth
- dc.subject.keyword financial frictions
- dc.subject.keyword pyramid schemes
- dc.subject.keyword Macroeconomics and International Economics
- dc.title Economic growth with bubblesca
- dc.type info:eu-repo/semantics/workingPaper