Do Asset Bubbles Exist and Can We Define Them?

We had a high tech bubble that burst and now we have a housing bubble that has burst. Economists are still not sure that they can define an asset bubble and they are conducting experiments that might give them some answers. This article is based upon the first chapter of PhD dissertation on the subject. The efficient market hypothesis, which is the dominant theory in finance, claims that bubbles cannot exist. Prices always reflect the best available information so the market is always right. On the other hand, we do have asset bubbles and if we knew more about them it might lead to interventions that would mitigate them.