New Book by José Scheinkman

In this book, Speculation, Trading, and Bubbles,  Professor José Scheinkman and other top economists explore how the history of financial markets is full of moments in which asset prices inflate far beyond their intrinsic value. These events are commonly called bubbles, and this book offers new explanations for this phenomenon. Scheinkman discusses some stylized facts concerning bubbles, such as high trading volume and the coincidence between bubbles’ implosion and increases in supply, and he develops a model for bubbles based on differences in beliefs among investors that explains these observations. Sandy Grossman and Patrick Bolton offer commentaries on Scheinkman’s work, investigating factors that contribute to bubbles, such as excessive leverage, overconfidence, mania, and panic in speculative markets. Kenneth J. Arrow and Joseph E. Stiglitz add introductory material contextualizing Scheinkman’s findings.

This book is the first in a series on the Kenneth J. Arrow Lecture Series, put on at Columbia University by the Program for Economic Research and the Committee on Global Thought.  The lecture series honors the contributions made to the field of economics by Kenneth J. Arrow, Professor Emeritus at Stanford University and Columbia University PhD.  The youngest Nobel Prize winner to date, Professor Arrow’s work on social choice theory, economics of information, and general equilibrium analysis has shaped the study of economics over the past sixty years.  The series and publications highlight the work of younger scholars, among them Nobel laureates, who have been influenced by Professor Arrow’s scholarship.

Speculation, Trading, and Bubbles
(Columbia University Press, July 2014)

More information about the Program for Economic Research can be found at, and the Committee for Global Thought at