  This article provides a self-contained overview of the theory of rational
asset price bubbles. We cover topics from basic definitions, properties, and
classical results to frontier research, with an emphasis on bubbles attached to
real assets such as stocks, housing, and land. The main message is that bubbles
attached to real assets are fundamentally nonstationary phenomena related to
unbalanced growth. We present a bare-bones model and draw three new insights:
(i) the emergence of asset price bubbles is a necessity, instead of a
possibility; (ii) asset pricing implications are markedly different between
balanced growth of stationary nature and unbalanced growth of nonstationary
nature; and (iii) asset price bubbles occur within larger historical trends
involving shifts in industrial structure driven by technological innovation,
including the transition from the Malthusian economy to the modern economy.
