Bubbles and Fools
Abstract: This article reviews the literature on greater-fool theories of bubbles, which argue that bubbles can arise if traders are willing to buy assets they know to be overvalued because they hope to later sell them at a profit to others. The author discusses two approaches that attempt to model this phenomenon and what these approaches imply for economic policy.
File format is application/pdf
Description: Full text
Provider: Federal Reserve Bank of Chicago
Part of Series: Economic Perspectives
Publication Date: 2015
Issue: Q II