Financial Market Bubbles and Crashes, Second Edition: Features, Causes, and Effects

Description

Economists broadly define financial asset price bubbles as episodes in which prices rise with notable rapidity and depart from historically established asset valuation multiples and relationships. Financial economists have for decades attempted to study and interpret bubbles through the prisms of rational expectations, efficient markets, and equilibrium, arbitrage, and capital asset pricing models, but they have not made much if any progress toward a consistent and reliable theory that explains how and why bubbles (and crashes) evolve and can also be defined, measured, and compared. This book develops a new and different approach that is based on the central notion that bubbles and crashes reflect urgent short-side rationing, which means that, as such extreme conditions unfold, considerations of quantities owned or not owned begin to displace considerations of price. Front Matter ....Pages i-xliii Front Matter ....Pages 1-1 Introduction (Harold L. Vogel)....Pages 3-45 Bubble Stories (Harold L. Vogel)....Pages 47-116 Crash Stories (Harold L. Vogel)....Pages 117-144 Money and Credit Features (Harold L. Vogel)....Pages 145-185 Front Matter ....Pages 187-187 Random Walks (Harold L. Vogel)....Pages 189-218 Rationality Rules (Harold L. Vogel)....Pages 219-269 Behavioral Beats (Harold L. Vogel)....Pages 271-295 Front Matter ....Pages 297-297 Bubble Dynamics (Harold L. Vogel)....Pages 299-336 Behavioral Risk Features (Harold L. Vogel)....Pages 337-350 Estimating and Forecasting (Harold L. Vogel)....Pages 351-370 Front Matter ....Pages 371-371 Financial Asset Bubble Theory (Harold L. Vogel)....Pages 373-382 Back Matter ....Pages 383-477