Consequences of Asset Shortages in Emerging Markets

April 1, 2012

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Format: Chicago

Patrick A. Imam, and Jiaqian Chen. Consequences of Asset Shortages in Emerging Markets, (USA: International Monetary Fund, 2012) accessed December 4, 2024

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.

Subject: Asset bubbles, Asset prices, Capital markets, Emerging and frontier financial markets, Financial crises, Financial markets, Financial services, Prices, Real interest rates

Keywords: Accounts receivable, Asset Bubble, Asset bubbles, Asset prices, Asset shortage, Asset shortage index, Asset shortages in EMs, Capital markets, Crisis, Current account, Emerging and frontier financial markets, Emerging Market, EMs' inability, Exchange rate, Fixed income, Global, Interest rates in EMs, Issuing financial assets, Market fundamentals, Market imperfection, Private equity, Real interest rates, Rising prices, WP

Publication Details

Pages:

43
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2012/102
Stock No:

WPIEA2012102
ISBN:

9781475502923
ISSN:

1018-5941

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