Speculation, Trading, and Bubbles

The history of financial markets is full of moments in which asset prices inflate far beyond their intrinsic value. These events are commonly called bubbles, and in this book, José A. Scheinkman and other top economists offer new explanations for this phenomenon. Scheinkman discusses some stylized facts concerning bubbles, such as high trading volume and the coincidence between bubbles implosion and increases in supply, and he develops a model for bubbles based on differences in beliefs among investors that explains these observations. Sandy Grossman and Patrick Bolton offer commentaries onNations Scheinkmans work, investigating factors that contribute to bubbles, such as excessive leverage, overconfidence, mania, and panic in speculative markets. Kenneth J. Arrow and Joseph E. Stiglitz add introductory material contextualizing Scheinkmans findings.

List of contents

Foreword, by Kenneth J. Arrow
Acknowledgments, by Joseph E. Stiglitz
Introduction, by Joseph E. Stiglitz
Speculation, Trading, and Bubbles, by José A. Scheinkman
Appendix: A Formal Model
Commentary, by Patrick Bolton
Commentary, by Sanford J. Grossman
Commentary, by Kenneth J. Arrow
Discussion
Notes
References
Notes on Contributors
Index

About the author

José A. Scheinkman. With Kenneth J. Arrow, Patrick Bolton, Sanford J. Grossman, and Joseph E. Stiglitz

Summary

José A. Scheinkman offers new insight into the mystery of bubbles in financial markets. Noting some general characteristics of bubbles—such as the rise in trading volume and the coincidence between increases in supply and bubble implosions—Scheinkman offers a model, based on differences in beliefs among investors, that explains these observations.

Report

"Scheinkman, a reigning guru of mathematical economics and a famously shrewd student of history and human nature, makes a point at once simple, valuable and durable." - David Warsh, Author of Knowledge and the Wealth of Nations

Product details

• Authors: Kenneth Arrow, Kenneth J. Arrow, Patrick Bolton, Sanford J. Grossman, Jose Scheinkman, José a Scheinkman, Jose A. Scheinkman, José A. Scheinkman, Jose Alexandre Scheinkman, Joseph Stiglitz
• Publisher: Columbia University Press
• Languages: English
• Product format: Hardback
• Released: 01.08.2014
• EAN: 9780231159029
• ISBN: 978-0-231-15902-9
• No. of pages: 128
• Assisted by: Patrick Bolton
• Series: Kenneth J. Arrow Lecture Series; Kenneth J. Arrow Lecture; INSTRUMENTATION IN THE CRYOGENIC INDUSTRY COMP 2V
• Subjects: Social sciences, law, business > Business > General, dictionaries; BUSINESS & ECONOMICS / Economic Conditions, BUSINESS & ECONOMICS / Forecasting, BUSINESS & ECONOMICS / Econometrics, Business & management, Investment and securities