Journal of Finance Vol. 43 No. 3 1988
Bubbles, Fads and Stock Price Volatility Tests: A Partial Evaluation
Abstract
This is a summary and interpretation of some of the literature on stock price volatility that was stimulated by Leroy and Porter [28] and Shiller [40] . It appears that neither small‐sample bias, rational bubbles nor some standard models for expected returns adequately explain stock price volatility. This suggests a role for some nonstandard models for expected returns. One possibility is a “fads” model in which noise trading by naive investors is important. At present, however, there is little direct evidence that such fads play a significant role in stock price determination.
- DOI
- 10.1111/j.1540-6261.1988.tb04596.x
- Volume
- 43
- Issue
- 3
- Pages
- 639-656
- Language
- en
- Sources
- crossref openalex