Asset Price Inflation in the 1980's: A Flow of Funds Perspective

Author/Editor:

Garry J. Schinasi ; Steven Riess Weisbrod ; Monica Hargraves

Publication Date:

October 1, 1993

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper examines how and why financial resources were channeled almost exclusively to specific asset markets in Japan, the United Kingdom, and the United States in the late 1980s. A decline in demand for funds by traditional borrowers, and a shift by savers from banks toward indirect securities investments were critical factors in all three cases. Until intermediaries and investors learned to evaluate new opportunities, funds were recycled in certain asset markets. The pressures on Japanese asset markets were particularly intense because of the size of Japan’s domestic saving relative to traditional domestic investment opportunities.

Series:

Working Paper No. 1993/077

Subject:

Asset prices Bank deposits Banking Business enterprises Economic sectors Financial institutions Inflation Prices Real estate prices Securities

English

Publication Date:

October 1, 1993

ISBN/ISSN:

9781451849936/1018-5941

Stock No:

WPIEA0771993

Pages:

40

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