Speculative Dynamics and the Role of Feedback Traders / David M. Cutler, James M. Poterba, Lawrence H. Summers.

Format:

Book

Author/Creator:

Cutler, David M.

Contributor:

National Bureau of Economic Research.

Poterba, James M.

Summers, Lawrence H.

Series:

Working Paper Series (National Bureau of Economic Research) no. w3243.

NBER working paper series no. w3243

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1990.

Summary:

This paper summarizes our earlier research documenting the characteristic speculative dynamics of many asset markets and suggests a framework for understanding them. Our model incorporates "feedback traders," traders whose demand is based on the history of past returns rather than the expectation of future fundamentals. We use this framework to describe ways in which the characteristic return patterns might be generated, and also to address the long-standing question of whether profitable speculation stabilizes asset markets.

Notes:

Print version record

January 1990.