Economics Seminar (2021-04)

Topic: Contagious Bubbles

Speaker: Feng Dong,Tsinghua University

Time: March 30th, Tuesday. 13:30p.m.- 15:00p.m. Beijing Time

Location: Room 217, Guanghua Building 2

Abstract:

This paper proposes a framework to study contagious stock bubbles in a multi-sector production economy with heterogeneous investment technologies. Due to financial frictions, stock bubbles arise endogenously that help inject additional liquidity. Due to financial linkages, the existence of bubbles in different sectors may be interdependent. Theoretically, we characterize the entire set of bubbly equilibria, and provide the condition under which the burst of bubbles in one sector spikes bubbles in other sectors. Quantitatively, we show that due to an unexpected burst of bubbles, it can generate a sizeable recession only when the burst happens in a critical sector and transmits to the rest of the economy.

Introduction:

Feng Dong is an associate professor of economics at School of Economics and Management, Tsinghua University. Feng earned his B.A. in Management from School of Information Resources Management at Renmin University of China in 2006, M.A. in Economics from China Center for Economic Research (CCER, now National School of Development) at Peking University in 2009, and Ph.D. in Economics from Washington University in 2014. His main research interest consists of macroeconomics, monetary economics, asset bubbles, and network economics.

董丰
，清华大学经济学院经济系副教授。董丰2006年结业于中国人民大学信息资源治理学院
，获治理学学士学位；2009年结业于北京大学中国经济研究中心（CCER
，现国家生长研究院）
，获经济学硕士学位；2014年结业于美国圣路易斯华盛顿大学
，获经济学博士学位。董丰的研究偏向主要包括宏观经济学、钱币经济学、资产泡沫、经济金融网络。

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