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Real indeterminacy and dynamics of asset price bubbles in general equilibrium

Abstract : We show that both real indeterminacy and asset price bubble may appear in an infinite-horizon exchange economy with infinitely lived agents and an imperfect financial market. We clarify how the asset structure and heterogeneity (in terms of preferences and endowments) affect the existence and the dynamics of asset price bubbles as well as the equilibrium indeterminacy. Moreover, this paper bridges the literature on bubbles in models with infinitely lived agents and that in overlapping generations models (Tirole, 1985).
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https://halshs.archives-ouvertes.fr/halshs-02993656
Contributor : Ngoc Sang Pham <>
Submitted on : Friday, November 6, 2020 - 10:09:00 PM
Last modification on : Tuesday, January 19, 2021 - 11:08:58 AM
Long-term archiving on: : Monday, February 8, 2021 - 3:31:16 AM

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Stefano Bosi, Cuong Le Van, Ngoc-Sang Pham. Real indeterminacy and dynamics of asset price bubbles in general equilibrium. 2020. ⟨halshs-02993656⟩

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