Federal Reserve Bank of Chicago
Bubbles and Fools
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.
Cite this item
Gadi Barlevy, "Bubbles and Fools"
, Federal Reserve Bank of Chicago, Economic Perspectives, issue Q II, pages 54-76, 2015.
Keywords: Bubbles; financial crisis
This item with handle RePEc:fip:fedhep:00013
is also listed on EconPapers
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