ECON 264B

Main Course

Fundamentals and Bubbles in Asset Prices

Description

Lecture, three hours. Requisite: course 264A. Designed for graduate students. Applications of dynamic general equilibrium to asset pricing in economies with exchange and production. Basic empirical puzzles in U.S. and international asset prices, 1880 to 2000: excess volatility, equity premium and risk-free rate puzzle, predictability. Models of habit formation, asset price bubbles, and limited arbitrage asset pricing theories. Market imperfections and bounded rationality. S/U or letter grading.

Prerequisites

• Required: ECON 264A

  Plan

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