Journal ArticleDOI
On the equivalence of solutions in rational expectations models
TLDR
In this article, the equivalence of solution indeterminancies discussed by Blanchard and by Taylor with bubble solutions was shown. But this was only for the case of bubble solutions.About:
This article is published in Journal of Economic Dynamics and Control.The article was published on 1983-02-01. It has received 35 citations till now. The article focuses on the topics: Equivalence (measure theory) & Rational expectations.read more
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EXPLOSIVE BEHAVIOR IN THE 1990s NASDAQ: WHEN DID EXUBERANCE ESCALATE ASSET VALUES? *
TL;DR: In this paper, a recursive test procedure is suggested that provides a mechanism for testing explosive behavior, date-stamping the origination and collapse of economic exuberance, and providing valid confidence intervals for explosive growth rates.
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On Testing for Speculative Bubbles
TL;DR: The idea that bubbles might exist is often traced to John Maynard Keynes's (1936) description of an equity market as an environment in which speculators anticipate "what average opinion expects average opinion to be," rather than focusing on things fundamental to the market as mentioned in this paper.
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Testing for Bubbles in Exchange Markets: A Case of Sparkling Rates?
TL;DR: In this article, the authors investigated the possibility that the observed deviations of major bilateral exchange rates from values implied by market fundamentals are a consequence of rational asset market bubbles and found that the bubble findings must be interpreted with care.
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The observable implications of self-fulfilling expectations
TL;DR: For example, this article showed that speculative bubbles were not part of the German hyperinflation, but dispute Shiller's conclusion that stock prices are excessively volatile and that what appears to be a speculative bubble could instead have arisen from rational agents responding solely to economic fundamentals not observed by the econometrician.
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A Test for Speculative Bubbles in the Sterling-Dollar Exchange Rate: 1981-84
TL;DR: The U.S. dollar price of the U.K. pound sterling is tested for a speculative bubble, defined as a period with a nonzero median in excess return as mentioned in this paper.
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Bubbles, Rational Expectations and Financial Markets
TL;DR: In this paper, the authors investigated the nature and presence of bubbles in financial markets and concluded that bubbles, in many markets, are consistent with rationality, that phenomena such as runaway asset prices and market crashes were consistent with rational bubbles.
Journal ArticleDOI
Market Fundamentals versus Price-Level Bubbles: The First Tests
Robert P. Flood,Peter M. Garber +1 more
TL;DR: In this article, the authors provide some tests of the proposition that bubbles were absent during the German hyperinflation, a proposition we are unable to reject, and the test methodology that they propose is general enough to be applied to other historical or contemporary episodes.
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A simple perfect foresight monetary model
TL;DR: In this article, the authors consider an economy in which individuals receive both a fixed endowment of real income and nominal transfer payments in the form of bills printed by the government during each period of life and develop a simple model which sharpens understanding of the forces that determine the equilibrium path of the price level and money income over time.
ReportDOI
Speculative Hyperinflations in Maximizing Models: Can We Rule Them Out?
TL;DR: The authors used an infinite-horizon model based on individual maximizing behavior to study whether explosive price-level paths unrelated to monetary growth can be equilibrium paths under rational expectations, and showed that implosive price level paths and divergent paths for capital asset prices are not equilibria under either monetary regime.