IMF Working Papers Volume 2012 Issue 102: Consequences of Asset Shortages in Emerging Markets (2012)

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Consequences of Asset Shortages in Emerging Markets

Author:

Patrick A. Imam

Patrick A. Imam
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Mr. Jiaqian Chen

Mr. Jiaqian Chennull

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Series:: IMF Working Papers

Volume/Issue:: Volume 2012: Issue 102

Publication Date:: 01 Apr 2012

DOI:: https://doi.org/10.5089/9781475502923.001

ISBN:: 9781475502923

ISSN:: 1018-5941

Pages:: 43

Keywords:: WP; asset shortage; current account; exchange rate; fixed income; Emerging Market; Crisis; Asset Bubble; accounts receivable; rising prices; EMs' inability; asset shortage index; private equity; interest rates in EMs; market fundamentals; asset shortages in EMs; issuing financial assets; market imperfection; Asset bubbles; Real interest rates; Asset prices; Capital markets; Emerging and frontier financial markets; Global

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Series:: IMF Working Papers

Volume/Issue:: Volume 2012: Issue 102

Language:: English

Publication Date:: 01 Apr 2012

DOI:: https://doi.org/10.5089/9781475502923.001

ISBN:: 9781475502923

ISSN:: 1018-5941

Pages:: 43

Keywords:: WP; asset shortage; current account; exchange rate; fixed income; Emerging Market; Crisis; Asset Bubble; accounts receivable; rising prices; EMs' inability; asset shortage index; private equity; interest rates in EMs; market fundamentals; asset shortages in EMs; issuing financial assets; market imperfection; Asset bubbles; Real interest rates; Asset prices; Capital markets; Emerging and frontier financial markets; Global

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

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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.

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IMF Working Papers

ISSN:: 1018-5941

Publisher:: International Monetary Fund

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