Speculation, Trading and Bubbles

Speculation, Trading and Bubbles

Using historical episodes - the South Sea bubble, the extraordinary rise of stock prices during the roaring twenties, the Internet bubble, and the recent credit bubble - José Scheinkman illustrated three stylized facts concerning asset price bubbles: ...

Summary

Using historical episodes - the South Sea bubble, the extraordinary rise of stock prices during the roaring twenties, the Internet bubble, and the recent credit bubble - José Scheinkman illustrated three stylized facts concerning asset price bubbles: that asset price bubbles coincide with increases in trading volume, that bubble deflation seems to correspond with increases in an asset’s supply, and that asset price bubbles often occur in times of financial or technological innovation.