Robert Waldmann

TL;DR: In this article, the authors present a simple overlapping generations model of an asset market in which irrational noise traders with erroneous stochastic beliefs both affect prices and earn higher expected returns.

TL;DR: In this paper, the role of rational speculators in financial markets was analyzed and it was shown that an increase in the number of forward-looking rational traders can lead to increased volatility of prices about fundamentals.

TL;DR: In this article, the authors present a possibly empirically important exception to this argument, based on the prevalence of positive feedback investors in financial markets, who buy securities when prices rise and sell when prices fall.

TL;DR: This article used the revised estimates of U.S. GNP constructed by Christina Romer (1989) to assess the time-series properties of output per capita over the past century and found that post-WWII output shocks appear persistent because automatic stabilizers and other demand management policies have substantially damped the transitory fluctuations that made up the Bums-Mitchell business cycle.

TL;DR: In this article, the role of rational speculators in financial markets was analyzed and it was shown that an increase in the number of forward-looking rational traders can lead to increased volatility of prices about fundamentals.