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Saturday, July 25, 2020 | History

2 edition of Bubbles and capital flows found in the catalog.

Bubbles and capital flows

by Jaume Ventura

  • 15 Want to read
  • 11 Currently reading

Published by Massachusetts Institute of Technology, Dept. of Economics in Cambridge, MA .
Written in English


About the Edition

This paper presents a stylized model of international trade and asset price bubbles. Its central insight is that bubbles tend to appear and expand in countries where productivity is low relative to the rest of the world. These bubbles absorb local savings, eliminating inefficient investments and liberating resources that are in part used to invest in high productivity countries. Through this channel, bubbles act as a substitute for international capital flows, improving the international allocation of investment and reducing rate-of-return differentials across countries. This view of asset price bubbles has important implications for the way we think about economic growth and fluctuations. It also provides a simple account of some real world phenomena that have been difficult to model before, such as the recurrence and depth of financial crises or their puzzling tendency to propagate across countries. Keywords: Asset Price Bubbles, International Capital Flows, Economic Growth. JEL Classification: F15, F36, F43.

Edition Notes

StatementJaume Ventura
SeriesWorking paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 02-36, Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 02-36.
ContributionsMassachusetts Institute of Technology. Dept. of Economics
The Physical Object
Pagination36 p. :
Number of Pages36
ID Numbers
Open LibraryOL24639516M
OCLC/WorldCa51806854

We argue that asset price movements, including the bubbles in equity markets and residential real estate markets, do a better job of explaining the international financial flows. 4 During the period of inflated asset values, U.S. consumers spent their new wealth, with a marginal propensity to consume of about 4%. Our calibrated model predicts Cited by: This book is intended as a combination of a reference book for those who work with cavitation or bubble dynamics and as a monograph for advanced students interested in some of the basic problems associated with this category of multi-phase flows. A book like this has many roots. It .

Capital Flows, Consumption Booms and Asset Bubbles: A Behavioural Alternative to the Savings Glut Hypothesis The Harvard community has made this article openly available. Please share how this access benefits you. Your story matters Citation Laibson, David, and Johanna Mollerstrom. Capital flows. The implications of capital mobility for growth and stability are some of the most contentious and least understood contemporary issues in economics. In this book Barry Eichengreen discusses historical, theoretical, empirical and policy aspects of the effects, both positive and negative, of capital flows.4/5(7).

These bubbles absorb local savings, eliminating inefficient investments and liberating resources that are in part used to invest in high productivity countries. Through this channel, bubbles act as a substitute for international capital flows, improving the international allocation of investment and reducing rate-of-return differentials across Author: Jaume Ventura.   Partly as a result of the Global Crisis, assessments of capital inflows and their impact on market efficiency and technology transfer have begun to take into account their association with financial crises. This column argues that the riskiness of inflows depends on the type of lender and its currency denomination. It finds that equity flows are more stable than debt flows.


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Bubbles and capital flows by Jaume Ventura Download PDF EPUB FB2

Additional Physical Format: Online version: Ventura, Jaume. Bubbles and capital flows. Cambridge, MA.: National Bureau of Economic Research, © Bubbles and capital flows Jaume Ventura1 CREI, Universitat Pompeu Fabra, Ramon Trias FargasBarcelona, Spain Received 24 March ; final version received 15 February ; accepted 16 February Available online 8 March Abstract This paper presents a stylized model of international trade and asset price bubbles.

done via prices and without any actual or recorded capital flow, this could be aptly described as a theory of capital flows with zero current accounts. Since bubbles act as a substitute for international capital flows, many of their effects are akin to those that one would expect from financial integration.

ByCited by: They reproduce bubbles dynamics in emerging economies with capital flows; capital inflows increasing domestic liquidity during the growth phase of the bubble, but when the bubble crashes, capital Author: Jaume Ventura. Bubbles and Capital Flows Jaume Ventura CREI and Universitat Pompeu Fabra Revised version: March JEL: F21, F36, F43 Abstract: This paper presents a stylized model of international trade and asset price bubbles.

Its central insight is that bubbles tend to appear and expand in countries where productivity is low relative to the rest of the.

Thispaperpresentsastylizedmodelofinternationaltradeandassetprice bubbles.1Itscentralinsightisthatbubblestendtoappearandexpandincountries.

It traces the history of past bubbles dating back to the 17th Century, and shows the connection and relationship to more recent bubbles, such as the bubbles of the 's, the Florida land boom and the stock market of the 's, the depression of the 's, the S&L scandal of the 's, the great bull market ofthe crash of Cited by: 8.

These bubbles absorb local savings, eliminating inefficient investments and liberating resources that are in part used to invest in high-productivity countries. Through this channel, bubbles act as a substitute for international capital flows, improving the international allocation of investment and reducing rate-of-return differentials across countries.

Moreover, the example can also be constructed in such a way that there no commodity trade between these countries either. 18 Concluding remarks The theory developed here views bubbles or pyramid schemes as a market-generated device to cilitate international capital flows in the presence of frictions in international financial markets.

he central insight is that bubbles tend to appear and expand in Cited by: Love Bubbles & Books but need to watch your budget. No worries. Try our Tiny Bubbles option:) Every month, receive access to the Subscriber Exclusives (5+ eBooks) along with 2 items. Your items will vary from month to month and may be two bath items or one bath item and one paperback book (Contemporary, Paranormal, or Historical Romances or a.

Through this channel, bubbles act as substitute for international capital flows, improving the international allocation of investment and reducing rate-of-return differentials across countries.

This view of asset price bubbles has important implications for. These bubbles absorb local savings, eliminating inefficient investments and liberating resources that are in part used to invest in high productivity countries.

Through this channel, bubbles act as substitute for international capital flows, improving the international allocation of investment and reducing rate-of-return differentials across countries. Through this channel, bubbles act as a substitute for international capital flows, improving the international allocation of investment and reducing rate-of-return differentials across countries.

This view of asset price bubbles has important implications for the way we. Bubbles, Booms, and Busts: The Rise and Fall of Financial Assets - Kindle edition by Rapp, Donald. Download it once and read it on your Kindle device, PC, phones or tablets. Use features like bookmarks, note taking and highlighting while reading Bubbles, Booms, and Busts: The Rise and Fall of /5(2).

Capital often flows out of these economies seeking these stores of value in the developed world. Bubbles are beneficial because they provide domestic stores of value and thereby reduce capital outflows while increasing investment. But they come at a cost, as they expose the country to bubble-crashes and capital flow by: These bubbles absorb local savings, eliminating inefficient investments and liberating resources that are in part used to invest in high productivity countries.

Through this channel, bubbles act as a substitute for international capital flows, improving the international allocation of investment and reducing rate-of-return differentials across.

Popular Financial Bubbles Books Showing of 11 Manias, Panics, and Crashes: A History of Financial Crises (Paperback) by. Charles P. Kindleberger (shelved 1 time as financial-bubbles) avg rating — 3, ratings — published Want to Read saving Want to Read. Capital flows refer to the movement of money for the purpose of investment, trade or business production, including the flow of capital within corporations in the form of investment capital.

Do Capital Flows Fuel Asset Bubbles in China. Liqing Zhang, Zhigang Huang School of Finance, Central University of Finance and Economics Abstract: Hot money inflows in China accelerated after the Global Financial Crisis.

We investigate the relation between capital inflows and asset prices. Empirical results show that the. Capital Flows, Consumption Booms and Asset Bubbles: A Behavioural Alternative to the Savings Glut Hypothesis * David Laibson. National asset bubbles explain the international imbalances.

The bubbles raised consumption, resulting in large trade deficits. In a sample of 18 OECD countries plus China, movements in home prices alone explain half Cited by:. Capital often flows out of these economies seeking these stores of value in the developed world.

Bubbles are beneficial because they provide domestic stores of value and thereby reduce capital outflows while increasing investment.

But they come at a cost, as they expose the country to bubble-crashes and capital flow : Peter L. Bernstein Classics Collection: Capital Ideas, Against the Gods, The Power of Gold and Capital Ideas Evolving This is 4 books in one - more than pages.

This collection was published posthumously after the market historian's death.capital flows to a sector of a given economy. The Real Estate sector is a relevant example. The current bubble literature is also focusing on sectoral issues but, again, the inception and end of bubbles are assumed to be largely exogenous and at the center of sectoral capital flows (see.