Asset Bubbles and Global Imbalances
- (pp. 209-51)
Abstract
We analyze the relationships between bubbles, capital flows, and economic activities in a rational bubble model with two large open economies. We establish a reinforcing relationship between global imbalances and bubbles. Capital flows from South to North facilitate the emergence and the size of bubbles in the North. Bubbles in the north in turn facilitate South-to-North capital flows. The model can simultaneously explain several stylized features of recent bubble episodes.Citation
Ikeda, Daisuke, and Toan Phan. 2019. "Asset Bubbles and Global Imbalances." American Economic Journal: Macroeconomics, 11 (3): 209-51. DOI: 10.1257/mac.20140286Additional Materials
JEL Classification
- E32 Business Fluctuations; Cycles
- E44 Financial Markets and the Macroeconomy
- F44 International Business Cycles
- G01 Financial Crises
- G14 Information and Market Efficiency; Event Studies; Insider Trading
- O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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