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Asset price bubbles: a survey

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  • Anna Scherbina
  • Bernd Schlusche

Abstract

Why do asset price bubbles continue to appear in various markets? What types of events give rise to bubbles and why do arbitrage forces fail to quickly burst them? Do bubbles have real economic consequences and should policy makers do more to prevent them? This paper provides an overview of recent literature on bubbles, with significant attention given to behavioral models and rational models with frictions. The latest U.S. real estate bubble is described in the context of this literature.

Suggested Citation

  • Anna Scherbina & Bernd Schlusche, 2014. "Asset price bubbles: a survey," Quantitative Finance, Taylor & Francis Journals, vol. 14(4), pages 589-604, April.
    • Handle: RePEc:taf:quantf:v:14:y:2014:i:4:p:589-604
    DOI: 10.1080/14697688.2012.755266
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    References listed on IDEAS

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    1. Lucy F. Ackert & Bryan K. Church & Richard Deaves, 2002. "Bubbles in experimental asset markets: Irrational exuberance no more," FRB Atlanta Working Paper 2002-24, Federal Reserve Bank of Atlanta.
    2. Owen Lamont, 2004. "Go Down Fighting: Short Sellers vs. Firms," NBER Working Papers 10659, National Bureau of Economic Research, Inc.
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