We analyze a simple overlapping-generations model with two capital goods. The dynamical system is de...ned by savings behavior and short-run perfect-foresight assetmarket clearing. Since lifetimes are ...nite, there is no transversality condition. If there is a bubble in asset pricing, it will burst in ...nite time: expectations will eventually be frustrated, but this may take several generations. This raises the question of whether (in...nite) long-run perfect foresight is a reasonable

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... on for overlappinggenerations economies and hence whether bursting bubbles can occur in equilibrium. We o¤er this paper as a token of our respect for Jean-Michel Grandmont. We thank Todd Keister, Tapan Mitra, Neil Wallace, the IJET referee and the IJET editor for their insightful comments. We are indebted to Huberto Ennis for laying the foundation for this project. Of course, only we are responsible for the errors and other peculiarities. y NIPE -Universidade do Minho, Braga 4710, Portugal.