... and observed investors' behavior. The chapter presents a few examples that are particularly relevant with respect to the dynamics of financial instability. The discussion begins with some empirical evidence of a positive feedback from past equity returns into the demand for equities. As this demand exhibits...

... as Harvard treasurer was to raise the common stock allocation, by investing new money in equities and through the appreciation of stocks, after eight months of assuming his position. He did it prudently by not shifting more money into equities during the eight-month period. Consequently, by the time stocks...