Funding externalities, asset prices and investors' "search for yield"

Vol: 
12/2008
Author name: 
Gai P
Trivedi K
Year: 
2008
Month: 
January
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.

Publication file: 

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