Abstract
Mill (1848) and others recognized the existence of self-fulfilling prophecies in speculative markets, but viewed them as fundamentally irrational because they were supposedly deviations from the longer run equilibrium. Keynes (1936, Chap. 12) and Samuelson (1957) were the first to propose that a speculative bubble might possibly be a rational self-fulfilling prophecy in some sense.1
“Then we, As we beheld her striding there alone, Knew that there never was a world for her Except the one she sang and, singing, made,”
Wallace Stevens, 1947 “The Idea of Order at Key West”
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© 1991 Kluwer Academic Publishers
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Rosser, J.B. (1991). Speculative Bubbles and Crashes II: Rational and Semi-Rational. In: From Catastrophe to Chaos: A General Theory of Economic Discontinuities. Springer, Boston, MA. https://doi.org/10.1007/978-1-4613-3796-6_5
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DOI: https://doi.org/10.1007/978-1-4613-3796-6_5
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