Citation

Discussion Paper Details

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Full Details

Title: The Macroeconomics of Rational Bubbles: A User's Guide

Author(s): Alberto Martín and Jaume Ventura

Publication Date: January 2018

Keyword(s): bubbles, Business Cycles, credit, Economic Growth, Financial Frictions and pyramid schemes

Programme Area(s): Financial Economics, International Macroeconomics and Finance, Macroeconomics and Growth and Monetary Economics and Fluctuations

Abstract: This paper provides a guide to macroeconomic applications of the theory of rational bubbles. It shows that rational bubbles can be easily incorporated into standard macroeconomic models, and illustrates how they can be used to account for important macroeconomic phenomena. It also discusses the welfare implications of rational bubbles and the role of policy in managing them. Finally, it provides a detailed review of the literature.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12641

Bibliographic Reference

Martín, A and Ventura, J. 2018. 'The Macroeconomics of Rational Bubbles: A User's Guide'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12641