Abstract We develop a model of rational bubbles based on leverage and the assumption an imprecisely known maximum market size. In bubble, traders push asset price above its fundamental value in dynamic way, driven by expectations about future developments. At previously unknown date, bubble will endogenously burst. Households optimally decide whether to lend with limited liability. Bubbles incr...

Using quarterly housing price-to-rent ratios from 1970 to 2018, this paper investigated the presence of real estate bubbles at a national level in eight selected European countries, namely Belgium, France, Germany, Italy, Netherlands, Portugal, Spain, and United Kingdom. Then, we analyzed contagion among these countries. We applied generalized sup ADF test developed by Phillips et al. (2015) de...

The stability properties of a macromodel are determined by its characteristic roots. Conventional price level determinacy is achieved by imposing restrictions on policy rules so that the characteristic roots satisfy a saddlepath criterion. This paper shows how to choose arbitrary roots for the canonical New Keynesian macromodel using a simple forward-looking Taylor-type policy rule. We are able...

We conducted preference assessments with 4 typically developing children to identify potential reinforcers and assessed the reinforcing efficacy of those stimuli. Next, we tested two predictions of economic theory: that overall consumption (reinforcers obtained) would decrease as the unit price (response requirement per reinforcer) increased and that the cost and benefit components that defined...

This paper studies residential real estate investors and their relationship with local house price movement using several comprehensive micro data on mortgage application and performance. The paper makes two contributions to the growing literature on the recent boom and bust of the US housing market. First, using mortgage application data, we document the important role played by real estate in...

China's monetary policy has been progressively modified and transformed. In this study, the correlation between Chinese stock market is investigated. The CSI 300 index, trading volume of constituent stocks M2 R007 were selected to represent market, quantitative price policy, respectively. transmission mechanism regulatory effects hybrid on studied. Stock prices will rise when People’s Bank Chin...

Housing markets experience substantial price volatility, short term price change momentum and mean reversion of prices over the long run. Together these features, particularly at their most extreme, produce the classic shape of an asset bubble. In this paper, we review the stylized facts of housing bubbles and discuss theories that can potentially explain events like the boom-bust cycles of the...

purpose: to assess parameters that had a capability of influencing the rate of big bubble formation during deep anterior lamellar keratoplasty (dalk) in keratoconus. methods: a total of 290 consecutive eyes from 257 patients with keratoconus that underwent dalk using the big-bubble technique were enrolled. the influence of patient age and sex, family history of keratoconus, history of contact l...

This paper thoroughly integrates speculative bubbles to corporate finance literature by focusing on dividend policy issues. More specifically, we examine the importance of when testing for in S&P 500 equity index a data set spanning 1871 2014. Given phenomenon smoothing, particular U.S., question usefulness observed payments as fundamental factor bubbles. Circumventing construct hypothetical pa...