Rational speculative bubbles: A critical view

Ekonomski Anali

关键词: rational speculative bubbles;    fundamental value;    efficient financial markets;    rational expectations;    capital gain;   

DOI  :  10.2298/EKA0775073R

来源: DOAJ

【 摘 要 】

According to the theory of rational bubbles, the bubble is present whenever asset prices progressively diverge from their fundamental value, which occurs because agents expect that asset prices will continue to grow exponentially (self-fulfilling prophecies) far in the future and consistently, which promises the realization of ever larger capital gains. In our opinion, the basic shortcoming of this theory refers to the assumption that all market agents are perfectly informed and rational and, accordingly, form homogeneous expectations. The model does not explain decision-making processes or expectation formation, nor does it detect potential psychological and institutional factors that might significantly influence decision making processes and market participants’ reactions to news. Since assumptions of the model critically determine its validity, we conclude that comprehensiveness of the rational bubble model is, to put it mildly, limited.

【 授权许可】

Unknown