More on Bubbles

This will perturb David Andolfatto, who has heard enough about bubbles. But Andolfatto perturbation is enjoyable, for some reason, so here goes. Ben Lester told me about this 1993 paper by Allen, Morris, and Postlewaite on bubbles. Here's the relevant quote:

I think that corresponds quite closely to what I had in mind here (and see this post as well). I'll leave you to judge whether Allen, Morris, and Postlewaite are better or worse economic theorists than Paul Krugman or Noah Smith.