General-Purpose Technologies and Stock Market Bubbles

[2501.08215] General-Purpose Technologies and Stock Market Bubbles Skip to main content Search Submit Donate Log in Search arXiv Press Enter to search · Advanced search Economics > Theoretical Economics arXiv:2501.08215 (econ) [Submitted on 14 Jan 2025 ( v1 ), last revised 16 Aug 2026 (this version, v3)] Title: General-Purpose Technologies and Stock Market Bubbles Authors: Tomohiro Hirano , Keiichi Kishi , Alexis Akira Toda View a PDF of the paper titled General-Purpose Technologies and Stock Market Bubbles, by Tomohiro Hirano and 2 other authors View PDF HTML (experimental) Abstract: We develop a macro-finance model linking stock price bubbles to a general-purpose technology (GPT), such as information technology and artificial intelligence. Knowledge spillovers differ across production factors, generating unbalanced growth and causing stock prices to outgrow dividends. Under our conditions, the unique equilibrium contains a bubble on dividend-paying stocks even though agents share common beliefs and rationally anticipate its collapse. The probability that spillovers persist affects the bubble's duration but not its existence. When spillovers equalize as the technology matures, the economy reaches balanced growth and the bubble collapses. Through IPO proceeds, the bubble can increase R\&D employment, while accumulated knowledge remains productive afterward. More broadly, balanced growth is a knife-edge property: the restrictions used to obtain it make stock prices and dividends grow at the same rate, thereby ruling out rational bubbles on dividend-paying assets by construction. Subjects: Theoretical Economics (econ.TH) Cite as: arXiv:2501.08215 [econ.TH] (or arXiv:2501.08215v3 [econ.TH] for this version) https://doi.org/10.48550/arXiv.2501.08215 Focus to learn more arXiv-issued DOI via DataCite Submission history From: Alexis Akira Toda [ view email ] [v1] Tue, 14 Jan 2025 16:01:06 UTC (73 KB) [v2] Sat, 16 Aug 2025 17:00:51 UTC (315 KB) [v3] Sun, 16 Aug 2026 21:58:45 UTC (334 KB) Full-text links: Access Paper: View a PDF of the paper titled General-Purpose Technologies and Stock Market Bubbles, by Tomohiro Hirano and 2 other authors View PDF HTML (experimental) TeX Source view license Current browse context: econ.TH < prev | next > new | recent | 2025-01 Change to browse by: econ References & Citations NASA ADS Google Scholar Semantic Scholar export BibTeX citation Loading... BibTeX formatted citation × loading... Data provided by: Bookmark Bibliographic Tools Bibliographic and Citation Tools Bibliographic Explorer Toggle Bibliographic Explorer ( What is the Explorer? ) Connected Papers Toggle Connected Papers ( What is Connected Papers? ) Litmaps Toggle Litmaps ( What is Litmaps? ) scite.ai Toggle scite Smart Citations ( What are Smart Citations? ) Code, Data, Media Code, Data and Media Associated with this Article alphaXiv Toggle alphaXiv ( What is alphaXiv? ) Links to Code Toggle CatalyzeX Code Finder for Papers ( What is CatalyzeX? ) DagsHub Toggle DagsHub ( What is DagsHub? ) GotitPub Toggle Gotit.pub ( What is GotitPub? ) Huggingface Toggle Hugging Face ( What is Huggingface? ) ScienceCast Toggle ScienceCast ( What is ScienceCast? ) Demos Demos Replicate Toggle Replicate ( What is Replicate? ) Spaces Toggle Hugging Face Spaces ( What is Spaces? ) Spaces Toggle TXYZ.AI ( What is TXYZ.AI? ) Related Papers Recommenders and Search Tools Link to Influence Flower Influence Flower ( What are Influence Flowers? ) Core recommender toggle CORE Recommender ( What is CORE? ) Author Venue Institution Topic About arXivLabs arXivLabs: experimental projects with community collaborators arXivLabs is a framework that allows collaborators to develop and share new arXiv features directly on our website. Both individuals and organizations that work with arXivLabs have embraced and accepted our values of openness, community, excellence, and user data privacy. arXiv is committed to these values and only works with partners that adhere to them. Have an idea for a project that will add value for arXiv's community? Learn more about arXivLabs . Which authors of this paper are endorsers? | Disable MathJax ( What is MathJax? ) We gratefully acknowledge support from our major funders , member institutions , , and all contributors. About · Help · Contact · Subscribe · Copyright · Privacy · Accessibility · Operational Status (opens in new tab) Major funding support from

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