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Description of  Speculation, Trading, and Bubbles (Kenneth J. Arrow Lecture Series)

As long as there have been financial markets, there have been bubblesthose moments in which asset prices inflate far beyond their intrinsic value, often with ruinous results. Yet economists are slow to agree on the underlying forces behind these events. In this book Jos A. Scheinkman offers new insight into the mystery of bubbles. Noting some general characteristics of bubblessuch as the rise in trading volume and the coincidence between increases in supply and bubble implosionsScheinkman offers a model, based on differences in beliefs among investors, that explains these observations. Other top economists also offer their own thoughts on the issue: Sanford J. Grossman and Patrick Bolton expand on Scheinkman's discussion by looking at factors that contribute to bubblessuch as excessive leverage, overconfidence, mania, and panic in speculative marketsand Kenneth J. Arrow and Joseph E. Stiglitz contextualize Scheinkman's findings. Read more