What is it about?
When will rational bubbles exist and what is bubbles' implication in an economy with status seeking? I also prove that there are multiple equilibria with stochastic bubbles, which burst with an exogenous probability. Policy Suggestion: taxing wealth properly
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Why is it important?
Providing a method to introduce rational bubbles into an infinite-horizon GE model with limited agents
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This page is a summary of: THE SPIRIT OF CAPITALISM AND RATIONAL BUBBLES, Macroeconomic Dynamics, June 2015, Cambridge University Press,
DOI: 10.1017/s1365100514000972.
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