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Farhi, Emmanuel
and Tirole, Jean
(2009)
Bubbly Liquidity.
TSE Working Paper, n. 09-101
There is a more recent version of this item available.
Official URL : http://tse-fr.eu/pub/21965
Abstract
This paper analyzes the possibility and the consequences of asset price overvaluation in a dynamic economy where financially constrained firms demand and supply liquidity. Bubbles are more likely to emerge, the scarcer the supply of outside liquidity and the more limited the pledgeability of corporate income; they crowd investment in (out) when liquidity is abundant (scarce). We analyze the economic implications of firm heterogeneity, endogenous corporate governance, and stochastic bubbles. Finally we draw some implications for the way public policy could react to bubbles.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | October 2009 |
| JEL Classification: | E2 - Consumption, Saving, Production, Employment, and Investment E44 - Financial Markets and the Macroeconomy |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 18 Jan 2012 06:00 |
| Last Modified: | 02 Apr 2021 15:36 |
| OAI Identifier: | oai:tse-fr.eu:21965 |
| URI: | https://publications.ut-capitole.fr/id/eprint/3261 |
Available Versions of this Item
- Bubbly Liquidity. (deposited 18 Jan 2012 06:00) [Currently Displayed]
