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Annual Review of Economics

Volume 10, 2018

The Macroeconomics of Rational Bubbles: A User's Guide

Abstract

This review provides a guide to macroeconomic applications of the theory of rational bubbles. It shows that rational bubbles can be easily incorporated into standard macroeconomic models and illustrates how they can be used to account for important macroeconomic phenomena. It also discusses the welfare implications of rational bubbles and the role of policy in managing them. Finally, it provides a detailed review of the literature.

Keyword(s): bubbles, business cycles, credit, economic growth, financial frictions, JEL E32, JEL E44, JEL O40, pyramid schemes
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/content/journals/10.1146/annurev-economics-080217-053534
2018-08-02
2024-04-24
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/content/journals/10.1146/annurev-economics-080217-053534
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The Macroeconomics of Rational Bubbles: A User's Guide
Annual Review of Economics 10, 505 (2018); https://doi.org/10.1146/annurev-economics-080217-053534
/content/journals/10.1146/annurev-economics-080217-053534
/content/journals/10.1146/annurev-economics-080217-053534
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