Consequences of Asset Shortages in Emerging Markets

Author/Editor:

Patrick A. Imam ; Jiaqian Chen

Publication Date:

April 1, 2012

Electronic Access:

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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:

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. 12/102

Subject:

English

Publication Date:

April 1, 2012

ISBN/ISSN:

9781475502923/1018-5941

Stock No:

WPIEA2012102

Format:

Paper

Pages:

43

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