TY  - JOUR
AU  - Cutler,David M.
AU  - Poterba,James M.
AU  - Summers,Lawrence H.
TI  - Speculative Dynamics and the Role of Feedback Traders
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3243
PY  - 1991
Y2  - January 1991
UR  - http://www.nber.org/papers/w3243
L1  - http://www.nber.org/papers/w3243.pdf
N1  - Author contact info:
David M. Cutler
Department of Economics
Harvard University
1875 Cambridge Street
Cambridge, MA  02138
Tel: 617/496-5216
Fax: 617/496-8951
E-Mail: dcutler@harvard.edu

James M. Poterba
Department of Economics
MIT, E52-350
50 Memorial Drive
Cambridge, MA  02142-1347
Tel: 617/253-6673
Fax: 617/258-7804
E-Mail: poterba@nber.org

Lawrence H. Summers
Harvard Kennedy School of Government
79 JFK Street
Cambridge, MA 02138
Tel: 617/495-9322
Fax: 617/495-0436
E-Mail: lhs@harvard.edu
AB  - This paper summarizes our earlier research documenting the characteristic speculative dynamics of many asset markets and suggests a framework for understanding them. Our model incorporates "feedback traders," traders whose demand is based on the history of past returns rather than the expectation of future fundamentals. We use this framework to describe ways in which the characteristic return patterns might be generated, and also to address the long-standing question of whether profitable speculation stabilizes asset markets.
ER  -