NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Charles Kindleberger

Edward J. Kane

NBER Working Paper No. 10847
Issued in October 2004
NBER Program(s):   CF

Minimalist economists stubbornly resist Charles Kindleberger's characterization of investor expectations in a financial bubble as "irrational." This paper seeks to resolve the controversy by imbedding Kindleberger's well-researched, impressionistic theory of financial crises into an expanded, but still-minimalist model of rational expectations. Introducing the concepts of malicious disinformation and rational overpromotion creates an informational environment in which it is time-consuming and costly to distinguish fact from fiction. Rationality still requires that expectations and market fundamentals move together over long periods of time, but dishonorable overpromoters can earn substantial profits in the interim.

download in pdf format
   (164 K)

email paper

This paper is available as PDF (164 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Published: Kane, Edward J. "Charles Kindleberger: An Impressionist In A Minimalist World," Atlantic Economic Journal, v33(1,Mar), 2005, 35-42.

Users who downloaded this paper also downloaded these:
Kane w9634 Continuing Dangers of Disinformation in Corporate Accounting Reports
Summers, Minsky, Samuelson, Poole, and Volcker Macroeconomic Consequences of Financial Crises
Krugman, Bergsten, Dornbusch, Frenkel, and Kindleberger International Aspects of Financial Crises
Reinhart and Rogoff w15795 From Financial Crash to Debt Crisis
Zeckhauser, Patel, and Hendricks w3731 Nonrational Actors and Financial Market Behavior
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us