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Identifier to cite or link to this item: https://hdl.handle.net/10086/27737

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Title
Asset Bubbles, Endogenous Growth, and Financial Frictions
Creator
Creator Name
Hirano, Tomohiro Hirano, Tomohiro
Affiliation
Affiliation Name
University of Tokyo
Creator Name
Yanagawa, Noriyuki Yanagawa, Noriyuki
Affiliation
Affiliation Name
University of Tokyo
Key Word
Asset Bubbles
Endogenous Growth
Financial Frictions
Abstract
This paper analyzes the existence and the effects of bubbles in an endogenous growth model with financial frictions and heterogeneous investments. Bubbles are likely to emerge when the degree of pledgeability is in the middle range, implying that improving the financial market might increase the potential for asset bubbles. Moreover, when the degree of pledgeability is relatively low, bubbles boost long-run growth; when it is relatively high, bubbles lower growth. Furthermore, we examine the effects of a bubble burst, and show that the effects depend on the degree of pledgeability, i.e., the quality of the financial system. Finally, we conduct a full welfare analysis of asset bubbles.
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2016-02
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
HIT-REFINED Working Paper Series ; No. 36
Relation
Related Identifier
URI
  http://www.ier.hit-u.ac.jp/hit-refined/
Number of Pages
82
Sponsorship
基盤研究(S) = Grants-in-Aid for Scientific Research (S)
Appears in Collections
Working Paper Series / Real Estate Markets, Financial Crisis, and Economic Growth An Integrated Economic Approach
URL
https://hdl.handle.net/10086/27737