FUNDING EXTERNALITIES, ASSET PRICES AND INVESTORS' "SEARCH FOR YIELD"

Prasanna Gai () and Kamakshya Trivedi

CAMA Working Papers from Australian National University, Centre for Applied Macroeconomic Analysis

Abstract: This note presents a simple model that nests the “excess liquidity” and “savings glut” hypotheses of the debate on the recent asset price boom. It clarifies the notion of investors’ ‘search for yield’ and shows how financial frictions influence asset price dynamics.

JEL-codes: G15 E44 E58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
Date: Written 2008-02
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