The real side of stock market exuberance: bubbles, output and productivity at the industry level
Francisco Queirós
Abstract:There has been a growing interest in the theory of rational bubbles. Recent theories predict that bubbles are expansionary, but differ in the underlying mechanisms. This paper provides empirical evidence that helps us to assess different theories, and documents four main findings: stock market overvaluation is associated with (i) faster output and input growth, (ii) declining total factor productivity (TFP) growth, (iii) a greater contribution of labour and a declining contribution of TFP for output growth, (i… Show more
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