Charles Kindleberger /
Kane, Edward J.
Charles Kindleberger / Edward J. Kane. - Cambridge, Mass. National Bureau of Economic Research 2004. - 1 online resource: illustrations (black and white); - NBER working paper series no. w10847 . - Working Paper Series (National Bureau of Economic Research) no. w10847. .
October 2004.
Minimalist economists stubbornly resist Charles Kindleberger's characterization of investor expectations in a financial bubble as "irrational." This paper seeks to resolve the controversy by imbedding Kindleberger's well-researched, impressionistic theory of financial crises into an expanded, but still-minimalist model of rational expectations. Introducing the concepts of malicious disinformation and rational overpromotion creates an informational environment in which it is time-consuming and costly to distinguish fact from fiction. Rationality still requires that expectations and market fundamentals move together over long periods of time, but dishonorable overpromoters can earn substantial profits in the interim.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Charles Kindleberger / Edward J. Kane. - Cambridge, Mass. National Bureau of Economic Research 2004. - 1 online resource: illustrations (black and white); - NBER working paper series no. w10847 . - Working Paper Series (National Bureau of Economic Research) no. w10847. .
October 2004.
Minimalist economists stubbornly resist Charles Kindleberger's characterization of investor expectations in a financial bubble as "irrational." This paper seeks to resolve the controversy by imbedding Kindleberger's well-researched, impressionistic theory of financial crises into an expanded, but still-minimalist model of rational expectations. Introducing the concepts of malicious disinformation and rational overpromotion creates an informational environment in which it is time-consuming and costly to distinguish fact from fiction. Rationality still requires that expectations and market fundamentals move together over long periods of time, but dishonorable overpromoters can earn substantial profits in the interim.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.