Journal of Political Economy Vol. 88 No. 4 1980
Market Fundamentals versus Price-Level Bubbles: The First Tests
Abstract
When current market price depends partly on the expected rate of market price change, it is possible that the market will launch itself onto a price bubble with price being driven by arbitrary, self-fulfilling elements in expectations. The purpose of this paper is to provide some tests of the proposition that bubbles were absent during the German hyperinflation, a proposition we are unable to reject. The test methodology that we propose is general enough to be applied to other historical or contemporary episodes.
- DOI
- 10.1086/260900
- Volume
- 88
- Issue
- 4
- Pages
- 745-770
- Language
- en
- Sources
- openalex crossref