01595cam a22002417 4500001000600000003000500006005001700011008004100028100002200069245011100091260006600202490004100268500002000309520064100329530006100970538007201031538003601103700002301139710004201162830007601204856003701280856003601317w3091NBER20141227090859.0141227s1989 mau||||fs|||| 000 0 eng d1 aFroot, Kenneth A.10aIntrinsic Bubblesh[electronic resource]:bThe Case of Stock Prices /cKenneth A. Froot, Maurice Obstfeld. aCambridge, Mass.bNational Bureau of Economic Researchc1989.1 aNBER working paper seriesvno. w3091 aSeptember 1989.3 aSeveral puzzling aspects of the behavior of United States stock prices can be explained by the presence of a specific type of rational bubble that depends exclusively on dividends. We call such bubbles "intrinsic" bubbles because they derive all of their variability from exogenous economic fundamentals, and none from extraneous factors. Unlike the most popular examples of rational bubbles, intrinsic bubbles provide an empirically plausible account of deviations from present-value pricing. Their explanatory potential comes partly from their ability to generate persistent deviations that appear relatively stable over long periods. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web.1 aObstfeld, Maurice.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w3091.4 uhttp://www.nber.org/papers/w309141uhttp://dx.doi.org/10.3386/w3091