Then, the dealer meets a buyer for sure, trades the asset with the buyer, and both the dealer and the buyer leave the DM. [...] An asset bubble occurs if the asset is traded for a positive amount of money, the price of money is positive, and all agents know that the consumption value of the asset for buyers is 0. [...] For states ω0E and ω0SD, let a01,t and p01,t be the amounts of the asset and money traded, that is, p01,t is the price of the asset. [...] The second and third subperiods are the same as the DM and the CM in the baseline model, respectively. [...] If it opened, the amount of buyers’ money holdings in the DM is equal to the amount that they bring from the CM minus the payment for goods sellers in the GM; otherwise, the amount of buyers’ money holdings in the DM is the same as the amount that they bring from the CM.
- Pages
- 30
- Published in
- Japan
