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Money is the roof of asset bubbles

Author

Listed:
  • Makoto WATANABE
  • Yu Awaya
  • kohei Iwasaki
Abstract
This paper examines how monetary expansion causes asset bubbles. Whenthere is no monetary expansion, a bubbly asset is not created due to a hold-upproblem. Monetary expansion increases buyers money holdings, and then, dealersare willing to buy a worthless asset from sellers, in hopes of selling it to buyers

Suggested Citation

  • Makoto WATANABE & Yu Awaya & kohei Iwasaki, 2024. "Money is the roof of asset bubbles," CIGS Working Paper Series 24-001E, The Canon Institute for Global Studies.
    • Handle: RePEc:cnn:wpaper:24-001e
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    File URL: https://cigs.canon/en/uploads/2024/01/MoneyBubbleJan2024.pdf
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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