We show that an unbounded number of consumption dates is necessary to support an asset pricing bubble. We work in a continuous-time model where the number of trade dates is infinite but the number of consumption dates is flexible and can be chosen to be uniformly bounded, finite almost surely, or infinite. Market clearing, together with monotone preferences for consumption, limits the properties of bubbles and provides restrictions on wealth constraints. In the special case of a uniformly bounded number of consumption dates, assets in positive net supply cannot have asset pricing bubbles and wealth constraints cannot allow limited arbitrage.
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Journal Of Economic Groth
The Journal of Economic Growth is a peer-reviewed academic journal covering research in economic growth and dynamic macroeconomics. It was established in 1996 and is published by Springer Science+Business Media. The journal deals with both theories and their empirics, and examines the entire array of subject areas in economic growth, including neoclassical and endogenous growth models, growth and income distribution, human capital, fertility, trade, development, migration, money, the political e