Search Results

Showing results 1 to 6 of approximately 6.

(refine search)
SORT BY: PREVIOUS / NEXT
Keywords:bubbles 

Report
Trading by Professional Traders: An Experiment

We examine how professional traders behave in two financial market experiments; we contrast professional traders’ behavior to that of undergraduate students, the typical experimental subject pool. In our first experiment, both sets of participants trade an asset over multiple periods after receiving private information about its value. Second, participants play the Guessing Game. Finally, they play a novel, individual-level version of the Guessing Game and we collect data on their cognitive abilities, risk preferences, and confidence levels. We find three differences between traders and ...
Staff Reports , Paper 939

Speech
Is the active use of macroprudential tools institutionally realistic?

Panel remarks at the Macroprudential Monetary Policy Conference, Federal Reserve Bank of Boston, Boston, Massachusetts.
Speech , Paper 180

Report
The side effects of safe asset creation

We present an incomplete markets model to understand the costs and benefits of increasing government debt in a low interest rate environment. Higher risk increases the demand for safe assets, lowering the natural rate of interest below zero, constraining monetary policy at the zero lower bound, and raising unemployment. Higher government debt satiates the demand for safe assets, raising the natural rate and restoring full employment. While this permanently lowers investment, a policymaker committed to low inflation has no alternative. Higher inflation targets, instead, permit both full ...
Staff Reports , Paper 842

Working Paper
Bubbles and Leverage: A Simple and Unified Approach

In this paper, we lay out a simple framework that captures much of what the theoretical literature has to say about the role of credit in systemically important asset booms and busts. In addition, we suggest ways in which to incorporate physical investment in the bubble asset as well as monetary policy.
Working Paper Series , Paper WP-2013-21

Working Paper
Bubbly Recessions

We develop a tractable rational bubbles model with financial frictions, downward nominal wage rigidity, and the zero lower bound. The interaction of financial frictions and nominal rigidities leads to a "bubbly pecuniary externality," where competitive speculation in risky bubbly assets can result in excessive investment booms that precede inefficient busts. The collapse of a large bubble can push the economy into a "secular stagnation" equilibrium, where the zero lower bound and the nominal wage rigidity constraint bind, leading to a persistent and inefficient recession. We evaluate ...
Working Paper , Paper 18-5

Briefing
The Roots of ‘Bubbly’ Recessions

A downturn following the collapse of an asset bubble ? an episode of speculative booms in asset prices ? can be severe and sustained, with output and employment often lower than in the prebubble economy. This Economic Brief considers some possible theoretical explanations. It argues, based on insights from a simple economic model, that the interaction among financial frictions, wage rigidity, and the constraints of monetary policy near the zero lower bound is a key source of inefficiency in large bubbles. One potential remedy is to regulate speculative investment on bubbly assets so that ...
Richmond Fed Economic Brief , Issue April

FILTER BY year

FILTER BY Content Type

Report 2 items

Working Paper 2 items

Briefing 1 items

Speech 1 items

FILTER BY Author

FILTER BY Jel Classification

C93 1 items

E10 1 items

E21 1 items

E3 1 items

E4 1 items

E40 1 items

show more (11)

PREVIOUS / NEXT