Testing the global banking glut hypothesis

Karlo Kauko and Maria Teresa Punzi

No 41, FinMaP-Working Papers from Collaborative EU Project FinMaP - Financial Distortions and Macroeconomic Performance: Expectations, Constraints and Interaction of Agents

Abstract: This paper presents VAR results on the recent economic history of the USand focuses on the dependence of US macro financial variables on international capital flows. Both gross and net flows are included in the analysis. The results indicate that cross-border funding has affected the build-up in the US housing market irrespective of how these flows are defined and measured. Both the savings glut hypothesis and the banking glut hypothesis are supported by these findings. However, net banking flows appear to explain the higher volatility in the increase in house prices as well as the mortgage loan boom.

Keywords: Global Banking Glut; Global Savings Glut; Cross-Border Banking Transactions; House Prices; Mortgage Loans; VAR model (search for similar items in EconPapers)
JEL-codes: F32 F33 F34 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Journal Article: Testing the global banking glut hypothesis (2015)
Working Paper: Testing the Global Banking Glut Hypothesis (2015)
Working Paper: Testing the Global Banking Glut Hypothesis (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fmpwps:41

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