Related papers: Bubble Necessity Theorem
We present an analysis of oil prices in US$ and in other major currencies that diagnoses unsustainable faster-than-exponential behavior. This supports the hypothesis that the recent oil price run-up has been amplified by speculative…
Mounting evidences are being gathered suggesting that income and wealth distribution in various countries or societies follow a robust pattern, close to the Gibbs distribution of energy in an ideal gas in equilibrium, but also deviating…
We consider the class of valuations on indivisible items called gross-substitute (GS). This class was introduced by Kelso and Crawford (1982) and is widely used in studies of markets with indivisibilities. GS is a condition on the…
This paper addresses the statistical properties of time series driven by rational bubbles a la Blanchard and Watson (1982), corresponding to multiplicative maps, whose study has recently be revived recently in physics as a mechanism of…
Regardless of the gold-standard being considered as outdated, it provides valuable signs concerning the development of novel monetary standards, better adjusted to the current macroeconomic environment. By using a point of view of classical…
We propose a novel model, the Hyped Log-Periodic Power Law Model (HLPPL), to the problem of quantifying and detecting financial bubbles, an ever-fascinating one for academics and practitioners alike. Bubble labels are generated using a…
A monopolist wishes to maximize her profits by finding an optimal price policy. After she announces a menu of products and prices, each agent $x$ will choose to buy that product $y(x)$ which maximizes his own utility, if positive. The…
In retrospect, the experimental findings on competitive market behavior called for a revival of the old, classical, view of competition as a collective higgling and bargaining process (as opposed to price-taking behaviors) founded on…
The pre-big bang's inflationary mechanism, when allowance is made for the rapid change of Newton's constant, is not actually of pole-law form . We give examples where pole-law inflation, which requires violation of the weak-energy…
By combining (i) the economic theory of rational expectation bubbles, (ii) behavioral finance on imitation and herding of investors and traders and (iii) the mathematical and statistical physics of bifurcations and phase transitions, the…
We here investigate bulk-viscosity driven quasi de-Sitter inflation, that is, the period of accelerated expansion in the early universe during which $-\dot{H}\ll H^2$, with $H(t)$ being the Hubble expansion rate. We do so in the framework…
We propose two rational expectation models of transient financial bubbles with heterogeneous arbitrageurs and positive feedbacks leading to self-reinforcing transient stochastic faster-than-exponential price dynamics. As a result of the…
We introduce an agent-based model, in which agents set their prices to maximize profit. At steady state the market self-organizes into three groups: excess producers, consumers and balanced agents, with prices determined by their own…
At the zero lower bound, the New Keynesian model predicts that output and inflation collapse to implausibly low levels, and that government spending and forward guidance have implausibly large effects. To resolve these anomalies, we…
We note that the essential idea of inflation, that the universe underwent a brief period of accelerated expansion followed by a long period of decelerated expansion, can be encapsulated in a "closure condition" which relates the amount of…
We show that in the simplest theories of spontaneous symmetry breaking one can have a stage of a fast-roll inflation. In this regime the standard slow-roll condition |m^2| << H^2 is violated. Nevertheless, this stage can be rather long if…
A class of generalized definitions of expectation value is often employed in nonequilibrium statistical mechanics for complex systems. Here, the necessary and sufficient condition is presented for such a class to be stable under small…
We propose that the minimal requirements for a model of stock market price fluctuations should comprise time asymmetry, robustness with respect to connectivity between agents, ``bounded rationality'' and a probabilistic description. We also…
We study a discrete-time consumption-based capital asset pricing model under expectations-based reference-dependent preferences. More precisely, we consider an endowment economy populated by a representative agent who derives utility from…
In this paper we demand that a successfull inflationary scenario should follow from a model entirely motivated by particle physics considerations. We show that such a connection is indeed possible within the framework of concrete…