ABEP

Asset Bubbles and Economic Policy

Coordinatore	Centre de Recerca en Economia Internacional (CREI)    more Spiacenti, non ci sono informazioni su questo coordinatore. Contattare Fabio per maggiori infomrazioni, grazie.
Nazionalità Coordinatore	Spain [ES]
Totale costo	999˙999 €
EC contributo	999˙999 €
Programma	FP7-IDEAS-ERC Specific programme: "Ideas" implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013)
Code Call	ERC-2009-AdG
Funding Scheme	ERC-AG
Anno di inizio	2010
Periodo (anno-mese-giorno)	2010-04-01   -   2015-03-31

 Partecipanti

#	participant	country	role	EC contrib. [€]
1	Centre de Recerca en Economia Internacional (CREI)  Organization address address: RAMON TRIAS FARGAS 25/27 city: BARCELONA postcode: 8005 contact info Titolo: Dr. Nome: Jaume Cognome: Ventura Fontanet Email: send email Telefono: 34935421765 Fax: 34935421860	ES (BARCELONA)	hostInstitution	999˙999.60
2	Centre de Recerca en Economia Internacional (CREI)  Organization address address: RAMON TRIAS FARGAS 25/27 city: BARCELONA postcode: 8005 contact info Titolo: Ms. Nome: Anna Cognome: Ricart Email: send email Telefono: 34935422721 Fax: 349354000000	ES (BARCELONA)	hostInstitution	999˙999.60

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 Obiettivo del progetto (Objective)

'Advanced capitalist economies experience large and persistent movements in asset prices that are difficult to justify with economic fundamentals. The internet bubble of the 1990s and the real state market bubble of the 2000s are two recent examples. The predominant view is that these bubbles are a market failure, and are caused by some form of individual irrationality on the part of market participants. This project is based instead on the view that market participants are individually rational, although this does not preclude sometimes collectively sub-optimal outcomes. Bubbles are thus not a source of market failure by themselves but instead arise as a result of a pre-existing market failure, namely, the existence of pockets of dynamically inefficient investments. Under some conditions, bubbles partly solve this problem, increasing market efficiency and welfare. It is also possible however that bubbles do not solve the underlying problem and, in addition, create negative side-effects. The main objective of this project is to develop this view of asset bubbles, and produce an empirically-relevant macroeconomic framework that allows us to address the following questions: (i) What is the relationship between bubbles and financial market frictions? Special emphasis is given to how the globalization of financial markets and the development of new financial products affect the size and effects of bubbles. (ii) What is the relationship between bubbles, economic growth and unemployment? The theory suggests the presence of virtuous and vicious cycles, as economic growth creates the conditions for bubbles to pop up, while bubbles create incentives for economic growth to happen. (iii) What is the optimal policy to manage bubbles? We need to develop the tools that allow policy makers to sustain those bubbles that have positive effects and burst those that have negative effects.'