Wealth Preference and Rational Bubbles

Material type: 文書・図像類

Author: Michau, Jean-Baptisteほか

Publisher: The Institute of Social and Economic Research, Osaka University

Publication date: 2018-06

Material Format: Paper

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Note (General)：: We consider a neoclassical economy where households derive utility from holding wealth. We show that, under some conditions, there can be rational bub...

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Paper

Material Type: 文書・図像類
Title: Wealth Preference and Rational Bubbles
Author/Editor: Michau, Jean-Baptiste
Ono, Yoshiyasu
Schlegl, Matthias
Author Heading: Michau, Jean-Baptiste
Ono, Yoshiyasu
https://nrid.nii.ac.jp/nrid/1000070130763
Schlegl, Matthias
https://nrid.nii.ac.jp/nrid/1000050844982
Publication, Distribution, etc.: The Institute of Social and Economic Research, Osaka University
Publication Date: 2018-06
Publication Date (W3CDTF): 2018-06
Periodical title: Institute of Social and Economic Research Discussion Papers
No. or year of volume/issue: 1035
Volume: 1035
Pages: 1-54
Text Language Code: eng
Subject Heading: Ponzi scheme
Rational bubble
Wealth preference
Target Audience: 一般
Note (General): We consider a neoclassical economy where households derive utility from holding wealth. We show that, under some conditions, there can be rational bubbles. Hence, we provide a microfoundation for bubbles that relies on a frictionless infitehorizon economy without any heterogeneity across households. While our bubbly equilibria are very similar to those obtained by Tirole (1985) in an overlapping generation economy, the underlying economics is different. Turning to public debt, we show that Ponzi schemes can be sustainable. Hence, in general, the limit on the accumulation of public debt by the government is not given by its no-Ponzi condition but, instead, by the representative households transversality condition. The Ricardian equivalence must hold in any of our equilibria. Finally, in the presence of money, the real equilibrium structure of the economy remains unchanged. We carefully investigate the effects of helicopter drops of money on the possibility of Ponzi schemes and of speculative hyperinflation or deflation.
References (URI): URI
http://www.iser.osaka-u.ac.jp/library/dp/2018/DP1035.pdf
Data Provider (Database): 国立情報学研究所 : 学術機関リポジトリデータベース（IRDB）（機関リポジトリ）
https://irdb.nii.ac.jp
Original Data Provider (Database): 大阪大学 : 大阪大学学術情報庫　桜華