JANUARY 5, 2021
Speculative bubbles are good for growth! This observation led to major debates among economists in the 2000s. Researchers Xavier Raurich and Thomas Seegmuller sought to explain this phenomenon by studying how economic agents make investment decisions during the periods of their life as young adults, middle-aged adults, and retirees. Young people can therefore invest in their education, which is a productive but illiquid capital, through credits from the bubble (liquid assets stemming from speculative capital).
