News and Announcements

Bubbles

by Joan Giovannone | Feb 01, 2017

The Laboratory for Aggregate Economics and Finance (LAEF) at the University of California, Santa Barbara is pleased to announce a conference entitled “​Bubbles” at The Upham Hotel in Santa Barbara, February 24 - 25, 2017.

Many popular accounts of the economy assign an important role to bubbles, but the exact meaning of this term is unclear; it seems to mean simply a large increase in, for example, an asset price.  In contrast, in the academic literature a bubble is a deviation from the fundamental equilibrium, but that leaves open the issue of what the right fundamentals are -- that uncertainty means it is difficult to spot a bubble in the data.  Related to bubbles are other expectations-driven deviations from fundamental outcomes, including sunspots, self-fulfilling prophecies, and animal spirits, that involve agents making choices based on beliefs that end up justifying the beliefs.  The goal of this conference is to bring together researchers working on many aspects of these economic phenomena to explore questions including (i) how one identifies a bubble or other non-fundamental equilibria in the data, (ii) whether non-fundamental equilibria can help us understand the dynamics of asset markets, and (iii) what governments should do about them. 

The conference organizers are Zachary Bethune, Assistant Professor of Economics, Ana Fostel, Associate Professor of Economics, and Eric Young, Professor of Economics, all from the University of Virginia.


For more information, please visit the LAEF website.