Monetary Policy, Vagabonding Liquidity and Bursting Bubbles in New and Emerging Markets - An Overinvestment View
AbstractCredit booms have globally fuelled hikes in stock, raw material and real estate markets which have culminated in the recent US subprime market crisis. We explain the global asset market booms since the mid 1980s based on the overinvestment theories of Hayek, Wicksell and Schumpeter. We argue that ample liquidity supply originating in the large industrialized countries has contributed to overinvestment cycles in Japan, East Asia, new markets in the industrial countries and many emerging market economies. Expansionary monetary policies in response to the burst of bubbles are argued to have contributed to vagabonding bubbles around the globe.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 5201.
Date of creation: 10 Sep 2007
Date of revision:
Bubbles; Boom-Bust Cycles; Hayek; Wicksell; Schumpeter; Emerging Markets; Capital Flows; Overinvestment Theories;
Other versions of this item:
- Gunther Schnabl & Andreas Hoffmann, 2008. "Monetary Policy, Vagabonding Liquidity and Bursting Bubbles in New and Emerging Markets: An Overinvestment View," The World Economy, Wiley Blackwell, vol. 31(9), pages 1226-1252, 09.
- Andreas Hoffmann & Gunther Schnabl, 2007. "Monetary Policy, Vagabonding Liquidity and Bursting Bubbles in New and Emerging Markets – An Overinvestment View," CESifo Working Paper Series 2100, CESifo Group Munich.
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-13 (All new papers)
- NEP-MAC-2007-10-13 (Macroeconomics)
- NEP-MON-2007-10-13 (Monetary Economics)
- NEP-SEA-2007-10-13 (South East Asia)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gunther Schnabl, 2009.
"Exchange Rate Volatility and Growth in Emerging Europe and East Asia,"
Open Economies Review,
Springer, vol. 20(4), pages 565-587, September.
- Gunther Schnabl, 2007. "Exchange Rate Volatility and Growth in Emerging Europe and East Asia," CESifo Working Paper Series 2023, CESifo Group Munich.
- Greiber, Claus & Setzer, Ralph, 2007. "Money and housing: evidence for the euro area and the US," Discussion Paper Series 1: Economic Studies 2007,12, Deutsche Bundesbank, Research Centre.
- Ronald Ian McKinnon & Gunther Schnabl, 2006.
"China’s Exchange Rate and International Adjustment in Wages, Prices, and Interest Rates: Japan Déjà Vu?,"
CESifo Working Paper Series
1720, CESifo Group Munich.
- Ronald McKinnon & Gunther Schnabl, 2006. "China's Exchange Rate and International Adjustment in Wages, Prices and Interest Rates: Japan Déjà Vu?," CESifo Economic Studies, CESifo, vol. 52(2), pages 276-303, June.
- Ronald McKinnon & Gunther Schnabl, 2003.
"The East Asian Dollar Standard, Fear of Floating, and Original Sin,"
112003, Hong Kong Institute for Monetary Research.
- Ronald McKinnon & Gunther Schnabl, 2004. "The East Asian Dollar Standard, Fear of Floating, and Original Sin," Review of Development Economics, Wiley Blackwell, vol. 8(3), pages 331-360, 08.
- Ronald McKinnon & Gunther Schnabl, 2003. "The East Asian Dollar Standard, Fear of Floating, and Original Sin," Working Papers 03001, Stanford University, Department of Economics.
- Schnabl, Gunther, 2008.
"Exchange rate volatility and growth in small open economies at the EMU periphery,"
Elsevier, vol. 32(1), pages 70-91, March.
- Schnabl, Gunther, 2007. "Exchange rate volatility and growth in small open economies at the EMU periphery," Working Paper Series 0773, European Central Bank.
- Gerhard Illing, 2001. "Financial Fragility, Bubbles and Monetary Policy," CESifo Working Paper Series 449, CESifo Group Munich.
- Ronald I. McKinnon & Kenichi Ohno, 1997. "Dollar and Yen: Resolving Economic Conflict between the United States and Japan," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262133350, June.
- Richard Herring & Susan Wachter, . "Bubbles in Real Estate Markets," Zell/Lurie Center Working Papers 402, Wharton School Samuel Zell and Robert Lurie Real Estate Center, University of Pennsylvania.
- Peter Backé & Balázs Égert & Tina Zumer, 2006.
"Credit Growth in Central and Eastern Europe: New (Over)Shooting Stars?,"
Focus on European Economic Integration,
Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 112 - 139.
- Egert, Balázs & Backé, Peter & Zumer, Tina, 2006. "Credit growth in Central and Eastern Europe: new (over)shooting stars?," Working Paper Series 0687, European Central Bank.
- Michael M. Hutchison & Takatoshi Ito & Frank Westermann, 2005. "The Great Japanese Stagnation: Lessons for Industrial Countries," EPRU Working Paper Series 05-13, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Global Rebalancing: A Modest Role for the RMB
by Shifting Wealth in ShiftingWealth on 2011-05-18 12:42:00
- Four Reasons Why The EXIT Will Fail
by Mario Rizzo in Think Markets on 2009-11-10 02:46:02
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.