General-Purpose Technology and Speculative Bubble Detection
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arXiv
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| Auteurs principaux: | , , , , |
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| Format: | Preprint |
| Publié: |
2026
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| _version_ | 1866913103437889536 |
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| author | Chen, Haiqiang Chen, Li Huang, Difang Li, Yuexin Zhang, Zhengjun |
| author_facet | Chen, Haiqiang Chen, Li Huang, Difang Li, Yuexin Zhang, Zhengjun |
| contents | We show that the leading bubble test suffers severe size distortion when fundamentals incorporate general-purpose technology adoption. Embedding a hump-shaped technology shock in the Campbell-Shiller present-value model, we prove that the fundamental price becomes locally explosive during adoption, contaminating the test's limit distribution with a non-centrality parameter proportional to the shock's peak. We propose a fundamental-versus-speculative decomposition that projects prices onto observable technology proxies and applies the test to the residual. Empirically, the decomposition eliminates evidence of speculation in the 2020-2025 AI rally while confirming a speculative peak confined to December 1999-March 2000 in the dot-com episode. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2604_25826 |
| institution | arXiv |
| publishDate | 2026 |
| record_format | arxiv |
| spellingShingle | General-Purpose Technology and Speculative Bubble Detection Chen, Haiqiang Chen, Li Huang, Difang Li, Yuexin Zhang, Zhengjun General Economics Economics Applications We show that the leading bubble test suffers severe size distortion when fundamentals incorporate general-purpose technology adoption. Embedding a hump-shaped technology shock in the Campbell-Shiller present-value model, we prove that the fundamental price becomes locally explosive during adoption, contaminating the test's limit distribution with a non-centrality parameter proportional to the shock's peak. We propose a fundamental-versus-speculative decomposition that projects prices onto observable technology proxies and applies the test to the residual. Empirically, the decomposition eliminates evidence of speculation in the 2020-2025 AI rally while confirming a speculative peak confined to December 1999-March 2000 in the dot-com episode. |
| title | General-Purpose Technology and Speculative Bubble Detection |
| topic | General Economics Economics Applications |
| url | https://arxiv.org/abs/2604.25826 |