Consequences of Asset Shortages in Emerging Markets
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Summary:
We assess econometrically the impact of asset shortages on economic growth, asset bubbles, the probability of a crisis, and the current account for a group of 41 Emerging markets for 1995-2008. The econometric estimations confirm that asset shortages pose a serious danger to EMs in terms of reducing economic growth, raising the probability of a crisis, and leading to asset price bubbles. Moreover, asset shortages can also explain the current account positions of EMs. The findings suggest that the consequences of asset shortages for macroeconomic stability are significant, and must be tackled urgently. We conclude with policy implications.
Series:
Working Paper No. 2012/102
Subject:
Asset bubbles Asset prices Capital markets Emerging and frontier financial markets Financial crises Financial markets Financial services Prices Real interest rates
English
Publication Date:
April 1, 2012
ISBN/ISSN:
9781475502923/1018-5941
Stock No:
WPIEA2012102
Pages:
43
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