Bubbles and Self-Enforcing Debt
---- Acknowledgments ----
We thank Marios Angeletos, Andy Atkeson, V.V. Chari, Hal Cole, Nobu Kiyotaki, Narayana Kocherlakota, John Moore, Fabrizio Perri, Balasz Szentes, Aleh Tsyvinski, Ivan Werning, and Mark Wright for useful comments and seminar audiences at the Columbia, European University Institute (Florence), Mannheim, Maryland, the Max Planck Institute (Bonn), NYU, Notre Dame, Penn State, Pompeu Fabra, Stanford, Texas (Austin), UCLA, UCSB, the Federal Reserve Banks of Chicago, Dallas and Minneapolis, the 2002 SED Meetings (New York), 2002 Stanford Summer Institute in Theoretical Economics, the 2003 Bundesbank/CFS/FIC conference on Liquidity and Financial Instability (Eltville, Germany) for feedback. Lorenzoni thanks the Research Department of the Minneapolis FED for hospitality during part of this research. Hellwig gratefully acknowledges financial support through the ESRC. All remaining errors and omissions are our own. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.