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Macroeconomic Analysis of Asset Bubbles and Its Policy Implications: A Review

Author

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  • Ryo Jinnai

    (Professor, Institute of Economic Research, Hitotsubashi University)

Abstract

This paper discusses the latest research trends on the asset price bubble. I discuss possible reasons why policymakers and researchers have differing opinions on the subject. I discuss a famous policy controversy, as well as the recurrent-bubble model that my collaborators and I have developed. This paper also discusses its policy implications.

Suggested Citation

  • Ryo Jinnai, 2023. "Macroeconomic Analysis of Asset Bubbles and Its Policy Implications: A Review," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 19(3), pages 1-13, September.
    • Handle: RePEc:mof:journl:ppr19_03_04
    DOI: 10.57520/prippr.19-3-4
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    References listed on IDEAS

    as
    1. Frank Smets & Rafael Wouters, 2007. "Shocks and Frictions in US Business Cycles: A Bayesian DSGE Approach," American Economic Review, American Economic Association, vol. 97(3), pages 586-606, June.
    2. Alberto Martin & Jaume Ventura, 2012. "Economic Growth with Bubbles," American Economic Review, American Economic Association, vol. 102(6), pages 3033-3058, October.
    3. Gadi Barlevy, 2018. "Bridging Between Policymakers’ and Economists’ Views on Bubbles," Economic Perspectives, Federal Reserve Bank of Chicago, issue 4, pages 1-21.
    4. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-1370, November.
    5. Tirole, Jean, 1985. "Asset Bubbles and Overlapping Generations," Econometrica, Econometric Society, vol. 53(6), pages 1499-1528, November.
    6. Shi, Shouyong, 2015. "Liquidity, assets and business cycles," Journal of Monetary Economics, Elsevier, vol. 70(C), pages 116-132.
    7. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    price asset bubble; rationality; economic policy;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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