RFS Advance Access originally published online on February 7, 2008
Review of Financial Studies 2008 21(1):11-17; doi:10.1093/rfs/hhn001
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Bubbles: Some Perspectives (and Loose Talk) from History
Johnson Graduate School of Management, Cornell University
Address correspondence to: Maureen O'Hara, Johnson Graduate School of Management, Cornell University, Ithaca, NY 14850; telephone: 607 255 2645; fax: 607 255 5993, e-mail: mo19{at}cornell.edu.
JEL Classification: G12, B0, E30
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Bubbles are a topic of great importance and great controversy. This paper discusses alternative perspectives on the economic meaning and origin of bubbles. Drawing on historical approaches to bubbles, this article sets out a taxonomy of approaches used to explain the nature of bubbles. The paper also considers issues connected with the scientific thinking surrounding bubbles.
I would like to thank Utpal Bhattacharya, David Easley, Stephen Ross, and Matthew Spiegel for helpful comments.