A previous version of the paper has been published as Bank of Finland BOFIT Discussion Paper No. 27-2012. The views expressed in the paper are those of the authors and do not necessarily reflect the views of the Bank of Finland. The recent increase in Chinese house prices has led to concerns that China is vulnerable to asset price shocks. In this paper, we apply recently developed recursive uni...

Various \no trade" theorems suggest that rational agents who start from a common prior should not make speculative bets with each other. To support speculation, market microstructure models typically invoke agents with dynamic hedging demands. Thus a \bar bet", a simple bet on a risk-irrelevant topic negotiated in an informal but non-private social context, seems irrational. We might, however, ...

In this paper, we show that rational bubbles can exist within a neoclassical economy, provided households derive utility from holding wealth. Hence, provide microfoundation for relies on frictionless economy with an infinitely-lived representative household. While our bubbly equilibria are very similar to those obtained by Tirole (1985) in overlapping generation the underlying mechanism is fund...

Establishing unambiguously the existence of speculative bubbles is an ongoing controversy complicated by the need of defining a model of fundamental prices. Here, we present a novel empirical method which bypasses all the difficulties of the previous approaches by monitoring external indicators of an anomalously growing interest in the public at times of bubbles. From the definition of a bubble...

My research on bubbles started with my book “Asymmetric Information: Bubbles, Crashes, Technical Analysis and Herding” (Oxford University Press, 2001). The book surveys and critiques the literature on bubbles and herding in settings in which different investors hold different information. One conclusion of the book is that it is difficult to obtain bubbles in models in which all market particip...

My research on bubbles started with my book “Asymmetric Information: Bubbles, Crashes, Technical Analysis and Herding” (Oxford University Press, 2001). The book surveys and critiques the literature on bubbles and herding in settings in which different investors hold different information. One conclusion of the book is that it is difficult to obtain bubbles in models in which all market particip...

Amid surging market values and widespread regulatory discussion, NFT DeFi markets are widely perceived as being simply speculative in nature. This paper detects the existence dates of price bubbles by applying SADF GSADF tests. We document that both exhibit bubbles, with more recurrent having higher average explosive magnitudes than bubbles. The highly correlated hype general cryptocurrency unc...