A note on effects of rational bubble on portfolios

2018 ◽  
Vol 492 ◽  
pp. 50-56 ◽  
Author(s):  
Chan Wang ◽  
Pu-yan Nie
Keyword(s):  
Rational Bubble

Putting Descartes before the horse (again!)

2008 ◽  
Vol 31 (2) ◽  
pp. 142-143 ◽  
Author(s):  
Brendan McGonigle ◽  
Margaret Chalmers
Keyword(s):  
Formal Model ◽  
Empirical Studies ◽  
Cognitive Growth ◽  
The Core ◽  
Target Article ◽  
New Models ◽  
Rational Bubble

AbstractThe “rational bubble” stance espoused in the target article confounds cultural symbolic achievements with individual cognitive competences. With no explicit role for learning, the core rationale for claiming a major functional discontinuity between humans and other species rests on a hybrid formal model LISA (Learning and Inference with Schemas and Analogies) now overtaken by new models of cognitive growth and new empirical studies within an embodied systems stance.

scholarly journals Solving the Mystery of Crypto’s Bubble

2020 ◽  
Vol 19 (3) ◽  
pp. 25-39
Author(s):  
Harsh Sengar
Keyword(s):  
Legal Entity ◽  
Market Participants ◽  
True Value ◽  
Herd Behaviour ◽  
Rational Bubble ◽  
Adf Test

Blockchain is the vehicle on which cryptocurrencies run, and it can’t be regulated by any legal entity during its operation.The huge growth in various cryptocurrency segments in 10 years has created the controversy of an inevitable bubble. A bubble can be generated either by queer herd behaviour or logical secular movement. Traces of evident bubbles have been a certainty and they take the perceived valuation of crypto to figures far away from its true value. This sudden diversion can be lethal due to the illogical, irrational propensity of regular market participants. This study observes ten cryptos under surveillance from September 2014 to August 2019. The selected ten (Monero, Bitcoin, XRP Ripple, Litecoin, Dogecoin, Monacoin, Ethereum, Bytecoin, Digibite, Potcoin) cryptocurrencies were studied for the last five years using Right Tailed ADF Test. Prominent traces of the rational bubble in all the underlying cryptocurrencies were found and have been considered for the study.

scholarly journals Asset Bubbles and Global Imbalances

2019 ◽  
Vol 11 (3) ◽  
pp. 209-251 ◽  
Author(s):  
Daisuke Ikeda ◽  
Toan Phan
Keyword(s):  
Capital Flows ◽  
Open Economies ◽  
Global Imbalances ◽  
Economic Activities ◽  
Asset Bubbles ◽  
The North ◽  
Rational Bubble

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. (JEL E32, E44, F44, G01, G14, O16)

scholarly journals Searching for rational bubble footprints in the Singaporean and Indonesian stock markets

2016 ◽  
Vol 41 (3) ◽  
pp. 529-552 ◽  
Author(s):  
Gilbert V. Nartea ◽  
Muhammad A. Cheema ◽  
Kenneth R. Szulczyk
Keyword(s):  
Stock Markets ◽  
Rational Bubble

scholarly journals On Testing for Speculative Bubbles

1990 ◽  
Vol 4 (2) ◽  
pp. 85-101 ◽  
Author(s):  
Robert P Flood ◽  
Robert J Hodrick
Keyword(s):  
Stock Prices ◽  
Rational Expectations ◽  
Empirical Studies ◽  
Empirical Work ◽  
Free Markets ◽  
Equity Prices ◽  
Speculative Bubbles ◽  
Market Participants ◽  
Current State ◽  
Rational Bubble

The possibility that movements in prices could be due to the self-fulfilling prophecies of market participants has long intrigued observers of free markets. This paper surveys the current state of the empirically-oriented literature concerning rational dynamic indeterminacies, by which we mean a situation of self-fulfilling prophecy within a rational expectations model. Empirical work in this area concentrates primarily on indeterminacies in price levels, exchange rates, and equity prices. We first examine a particular type of explosive indeterminacy, usually called a rational bubble, in an example of the market for equities. Then, we consider empirical work relating to price-level and exchange-rate indeterminacies and empirical studies of indeterminacies in stock prices. Finally, we take up some interpretive issues.

scholarly journals PRICE-RENT RATIO IN CHINA'S HOUSING MARKET: PROPER INTERVAL, MEASUREMENT AND AN EMPIRICAL STUDY

2004 ◽  
Vol 8 (2) ◽  
pp. 73-86 ◽  
Author(s):  
Yuelay Xie ◽  
Hongyu Liu
Keyword(s):  
Empirical Study ◽  
Housing Market ◽  
Housing Prices ◽  
Housing Price ◽  
Convincing Evidence ◽  
Price Bubbles ◽  
Two Factors ◽  
Rational Bubble ◽  
Fundamental Value ◽  
International Comparative

It has been a hot topic concerning about whether price bubbles exist in the housing market in several cities in China or otherwise. However, much of the debate lacks convincing evidence. This paper discusses the two factors which may lead the housing price to deviate from its fundamental value: rational bubble and economic irrationality. Also, the paper considers the price‐rent ratio as a valid indicator in reflecting the rationality of the housing price. Based on an international comparative study and the Income Capitalization Method, this paper will show that the proper interval of the price‐rent ratio in China's housing market should be around 150–200. At the end of this paper, an empirical study will be presented after an alternative measurement method for China's housing market is proposed. It will illustrate that housing prices in Shanghai and Hangzhou are overvalued while that in Beijing and Guangzhou are comparatively closer to the proper interval.

scholarly journals The Great Housing Boom of China

2017 ◽  
Vol 9 (2) ◽  
pp. 73-114 ◽  
Author(s):  
Kaiji Chen ◽  
Yi Wen
Keyword(s):  
Rational Expectations ◽  
Economic Transition ◽  
Housing Prices ◽  
National Income ◽  
High Rate ◽  
Resource Reallocation ◽  
The Past ◽  
Long Run ◽  
Housing Boom ◽  
Rational Bubble

China’s housing prices have been growing nearly twice as fast as national income over the past decade, despite a high vacancy rate and a high rate of return to capital. This paper interprets China’s housing boom as a rational bubble emerging naturally from its economic transition. The bubble arises because high capital returns driven by resource reallocation are not sustainable in the long run. Rational expectations of a strong future demand for alternative stores of value can thus induce currently productive agents to speculate in the housing market. Our model can quantitatively account for China’s paradoxical housing boom. (JEL O16, O18, P24, P25, R21, R31)

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