Asset Price Bubbles: A Selective Survey

IMF Working Papers, February 21, 2013

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Asset Price Bubbles: A Selective Survey

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Bibliographic details

• Authors: Anna Scherbina
• Published: February 21, 2013
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781475515299.001

Overview

• Author: Anna Scherbina
• Publication date: February 21, 2013
• Type: IMF Working Paper (Working Paper No. 2013/045)
• Scope: Provides an overview of recent literature on bubbles, with significant attention given to behavioral models and rational models with frictions.

Major findings and analytical focus

• The paper contrasts new literature with standard rational models, noting that the new literature is able to model the common characteristics of historical bubble episodes.
• Significant attention is given to:
  • Behavioral models.
  • Rational models with frictions.
• The literature surveyed offers insights for:
  • How bubbles are initiated and sustained.
  • The reasons they burst.
  • Why arbitrage forces do not routinely step in to squash them.
• The latest U.S. real estate bubble is described in the context of this literature.

Subjects and keywords

• Subjects: Asset bubbles, Asset prices, Financial crises, Financial institutions, Housing prices, Inflation, Prices, Real estate prices, Stocks
• Keywords: Asset bubbles, Asset prices, bubble asset, Bubbles, discount rate, equilibrium price, Europe, fair value, Financial Crisis, growth decrease, Housing prices, internet bubble, Limits to Arbitrage, long position, market price, overvalued asset, paper money, price limit, rate of return, Real estate prices, share price, Stocks, subprime mortgage, WP

Content in this bundle

• I. INTRODUCTION — Definitions, causes, and paper roadmap
  • I. INTRODUCTION — Definitions, causes, and paper roadmap (Markdown version)
  • I. INTRODUCTION — Definitions, causes, and paper roadmap (PDF)