Funding Externalities, Asset Prices and Investors' "Search for Yield"

Prasanna Gai, Kamakshya Trivedi

    Research output: Contribution to journalArticle

    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.
    Original languageEnglish
    Pages (from-to)73-82
    JournalBulletin of Economic Research
    Volume61
    Issue number1
    DOIs
    Publication statusPublished - 2009

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