Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296012 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 10923
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This paper examines how monetary expansion causes asset bubbles. When there is no monetary expansion, a bubbly asset is not created due to a hold-up problem. Monetary expansion increases buyers' money holdings, and then, dealers are willing to buy a worthless asset from sellers, in hopes of selling it to buyers who may not know that it is worthless—a bubble now occurs.
Subjects: 
bubbles
dealers
higher-order uncertainty
money
JEL: 
D82
D83
D84
E44
E52
G12
G14
Document Type: 
Working Paper
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