Bubble Necessity Theorem

• Tác giả: Tomohiro Hirano, Alexis Akira Toda
• Ngôn ngữ: eng
• Ký hiệu phân loại: 511.36 Proof theory and constructive mathematics
• Thông tin xuất bản: 2023
• Bộ sưu tập: Metadata
• ID: 197286

Tóm tắt

Asset price bubbles are situations where asset prices exceed the fundamental values defined by the present value of dividends. This paper presents a conceptually new perspective: the necessity of bubbles. We establish the Bubble Necessity Theorem in a plausible general class of economic models: with faster long-run economic growth ($G$) than dividend growth ($G_d$) and counterfactual long-run autarky interest rate ($R$) below dividend growth, all equilibria are bubbly with non-negligible bubble sizes relative to the economy. This bubble necessity condition naturally arises in economies with sufficiently strong savings motives and multiple factors or sectors with uneven productivity growth.