Cover IMF Working Papers
Asset Price Bubbles: A Selective Survey
Author: Ms. Anna Scherbina
Series:
IMF Working Papers
Volume/Issue:
Volume 2013: Issue 045
Language:
English
Publication Date:
21 Feb 2013
DOI:
https://doi.org/10.5089/9781475515299.001
ISBN:
9781475515299
ISSN:
1018-5941
Pages:
41
Keywords:
WP; discount rate; rate of return; subprime mortgage; fair value; share price; Bubbles; Limits to Arbitrage; Financial Crisis; overvalued asset; long position; price limit; market price; equilibrium price; paper money; growth decrease; internet bubble; bubble asset; Asset bubbles; Asset prices; Housing prices; Real estate prices; Stocks; Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Why do asset price bubbles continue to appear in various markets? This paper provides an overview of recent literature on bubbles, with significant attention given to behavioral models and rational models with frictions. Unlike the standard rational models, the new literature is able to model the common characteristics of historical bubble episodes and offer insights for how bubbles are initiated and sustained, the reasons they burst, and 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.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund