4  See John H. Cochrane (2001), Asset Pricing (Princeton: Princeton University Press), p. 402. 5  Such a bubble would be called a “rational bubble.” It is also conceivable that bubbles are present because some investors are not pricing assets rationally; for an introduction to that notion, see Annette Vissing-Jorgensen (2004), “Perspectives on Behavioral Finance: Does ‘Irrationality’ Disappear with Wealth?
2 The Bank’s view on recent economic and financial developments, determined by the Policy Board at the Monetary Policy Meeting held on July 16, as the basis of monetary policy decisions. BIS Review 63/1998  -2demand of private firms with the worsening of overall economic activities, and the continued cautious attitudes of private banks in extending loans.