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

Prasanna Gai and Kamakshya Trivedi

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

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: E44 E58 G15 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2008-02
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2008-12

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