Positive Feedback Investment Strategies and Destabilizing Rational Speculation

Preprint, Article OPEN
De Long, J. Bradford; Shleifer, Andrei; Summers, Lawrence H.; Waldmann, Robert J.;

Analyses of the role of rational speculators in financial markets usually presume that such investors dampen price fluctuations by trading against liquidity or noise traders. This conclusion does not necessarily hold when noise traders follow positive-feedback investmen... View more
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