Asset bubbles and bailouts

• 成果类型: Article
• 署名作者: Hirano, Tomohiro; Inaba, Masaru; Yanagawa, Noriyuki
• 署名单位: University of Tokyo; Kansai University
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2015.09.008
• 发表日期: 2015
• 页码: S71-S89
• 关键词: Bubble size; Anticipated bailouts; production efficiency; Boom-bust cycles; Optimal bailout policy

摘要

As long as bubble size is relatively small, bubbles increase production level, but once the size becomes too large, then bubbles reduce it. Given this non-monotonic relationship, this paper investigates the relationship between bubbles and government bailouts. It shows that bailouts for bursting bubbles may positively influence ex ante production efficiency and relax the existence condition of stochastic bubbles. The level of bailouts has a non-monotonic relationship with production efficiency and a partial bailout policy achieves production efficiency. Moreover, it examines the welfare effects of bailout policies rigorously and shows that even non-risky bubbles may be undesirable for taxpayers. (C) 2015 Elsevier B.V. All rights reserved.