Asset bubbles and efficiency in a generalized two-sector model

Stefano Bosi (University of Evry Paris-Saclay) & Cuong Le Van & Ngoc-Sang Pham (EM Normandie Business School)

 

We consider a multi-sector infinite-horizon general equilibrium model. The issues of equilibrium existence, efficiency, and bubble emergence are addressed. We show how different assets give rise to different rational bubbles. We also point out that efficient bubbly equilibria may exist.

 

Published in

Mathematical Social Sciences, 2017


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