A leverage-based model of speculative bubbles
By: Gadi Barlevy.
Contributors: Federal Reserve Bank of Chicago. Research Dept.
Series: Working paper series -- WP-2008-01; Working paper series (Federal Reserve Bank of Chicago. Research Dept. : Online) -- WP-2008-01.
Publisher: Federal Reserve Bank of Chicago
Published: 2008
Place of publication: [Chicago, Ill.]
Language: eng
Format: Electronic resource
Description: "This paper develops an equilibrium model of speculative bubbles that can be used to explore the role of various policies in either giving rise to or eliminating the possibility of asset bubbles, e.g.  restricting the use of certain types of loan contracts, imposing down- payment restrictions, and changing inter-bank rates.  As in previous work by Allen and Gorton (1993) and Allen and Gale (2000), a bubble arises in the model because traders are assumed to purchase assets with borrowed funds.  My model adds to this literature by allowing creditors and traders to enter into a more general class of contracts, as well as by allowing speculators to trade strategically"--Federal Reserve Bank of Chicago web site.
Notes: Title from PDF file as viewed on 1/24/2008.

Includes bibliographical references.

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