Quotes from “Extrapolation and Bubbles”

By Nicholas Barberis, Robin Greenwood, Lawrence Jin, & Andrei Shleifer (2018)

• Models of rational bubbles assume homogeneous investors and therefore cannot explain any volume, let alone highly specific patterns of volume documented in the literature.#
  ExpectationsBusiness cycle
• Nearly all bubbles from tulips to South Sea to the 1929 U.S. stock market to the late 1990s Internet occur on the back of good fundamental news.#
  FinanceBusiness cycle