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Literatures About Asset Price Bubbles

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  • BABAEI SEMIRUMI

    (Payam Noor University (PNU), Iran)

Abstract

A bubble is the difference between an asset's fundamental value and its market price.. Some researchers have defended the idea that it is possible that asset price bubbles moderate the effects of financial market frictions, like credit constraints and improve the allocation of investment, despite the occasional busts. Since asset prices affect the real allocation of an economy, it is important to understand the circumstances under which these prices can deviate from their fundamental. Strong regulatory and supervisory institutions are always the best line of defense. In this context, maintaining the credibility and reputation of the central bank so that it will be able to carry out its core function maintaining macroeconomic stability is essential.

Suggested Citation

  • Babaei Semirumi, 2012. "Literatures About Asset Price Bubbles," Annals - Economic and Administrative Series -, Faculty of Business and Administration, University of Bucharest, vol. 6(1), pages 35-55, December.
    • Handle: RePEc:but:anneas:v:6:y:2012:i:1:p:35-55
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    References listed on IDEAS

    as
    1. Mr. Burkhard Drees & Ceyla Pazarbasioglu, 1995. "The Nordic Banking Crises: Pitfalls in Financial Liberalization?," IMF Working Papers 1995/061, International Monetary Fund.
    2. Michael J. Cooper & Orlin Dimitrov & P. Raghavendra Rau, 2001. "A Rose.com by Any Other Name," Journal of Finance, American Finance Association, vol. 56(6), pages 2371-2388, December.
    3. John Y. Campbell & Robert J. Shiller, 2001. "Valuation Ratios and the Long-Run Stock Market Outlook: An Update," NBER Working Papers 8221, National Bureau of Economic Research, Inc.
    4. Chevalier, Judith & Ellison, Glenn, 1997. "Risk Taking by Mutual Funds as a Response to Incentives," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1167-1200, December.
    5. Stiglitz, Joseph E, 1990. "Symposium on Bubbles," Journal of Economic Perspectives, American Economic Association, vol. 4(2), pages 13-18, Spring.
    6. Allen F. & Morris S. & Postlewaite A., 1993. "Finite Bubbles with Short Sale Constraints and Asymmetric Information," Journal of Economic Theory, Elsevier, vol. 61(2), pages 206-229, December.
    7. Brunnermeier, Markus K., 2001. "Asset Pricing under Asymmetric Information: Bubbles, Crashes, Technical Analysis, and Herding," OUP Catalogue, Oxford University Press, number 9780198296980.
    8. McQueen, Grant & Thorley, Steven, 1994. "Bubbles, Stock Returns, and Duration Dependence," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 29(3), pages 379-401, September.
    9. Tirole, Jean, 1982. "On the Possibility of Speculation under Rational Expectations," Econometrica, Econometric Society, vol. 50(5), pages 1163-1181, September.
    10. Jonathan McCarthy & Richard Peach, 2004. "Are home prices the next \\"bubble\\"?," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 1-17.
    11. Allen, Franklin & Gale, Douglas, 2000. "Bubbles and Crises," Economic Journal, Royal Economic Society, vol. 110(460), pages 236-255, January.
    12. repec:bla:jfinan:v:58:y:2003:i:3:p:1113-1138 is not listed on IDEAS
    13. Franklin Allen & Gary Gorton, 1993. "Churning Bubbles," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(4), pages 813-836.
    Full references (including those not matched with items on IDEAS)

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