CAPITAL GAINS: BLUE MACHINES AND RED MACHINES
2005 ◽
Vol 50
(spec01)
◽
pp. 437-447
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Keyword(s):
Capital gains play an essential role in the intertemporal allocation of resources, but they can also fuel self-fulfilling bubbles. The simple case of 2 "identical" capitals is analyzed in an overlapping generations model. The only trajectory in which expectations are realized at every date is the one in which blue machines and red machines have the same price. If ever their prices differ, then there is a "bubble" which must burst in finite time.
2012 ◽
Vol 4
(6)
◽
pp. 319-330
Keyword(s):
2012 ◽
Vol 17
(6)
◽
pp. 1198-1226
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2017 ◽
Vol 27
(5)
◽
pp. 1181-1203
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Keyword(s):