@techreport{NBERw16750,
 title = "Bubbly Liquidity",
 author = "Emmanuel Farhi and Jean Tirole",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "16750",
 year = "2011",
 month = "January",
 URL = "http://www.nber.org/papers/w16750",
 abstract = {This paper analyzes the possibility and the consequences of rational bubbles in a dy- namic economy where financially constrained firms demand and supply liquidity. Bub- bles are more likely to emerge, the scarcer the supply of outside liquidity and the more limited the pledgeability of corporate income; they crowd investment in (out) when liquidity is abundant (scarce). We analyze extensions with firm heterogeneity and sto- chastic bubbles.},
}