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Capital formation is a key driver of the growth of potential output. With continuing widespread capital controls and persistently small inward FDI the volume of capital formation in India is constrained by domestic saving. The national saving rate in India (the sum of the saving rates of...
Persistent link: https://www.econbiz.de/10005123636
France's post-war growth has gone through four phases. The strong growth performance of the 1950s was helped by a phenomenon of catch-up on best foreign practices, and by a positive effect of capital rejuvenation. Yet the best performance was to follow and covered a period beginning around 1958...
Persistent link: https://www.econbiz.de/10005123721
This paper develops a micro-founded general equilibrium model of the financial system composed of ultimate borrowers, ultimate lenders and financial intermediaries. The model is used to investigate the impact of uncertainty about the likelihood of governmental bailouts on leverage, interest...
Persistent link: https://www.econbiz.de/10009144737
crash of 1929 and the bursting of the Japanese bubble in 1989. We then present some stylized facts on boom-bust dynamics in …
Persistent link: https://www.econbiz.de/10005504739
During technological revolutions, stock prices of innovative firms tend to exhibit high volatility and bubble … likely; as a result, stock prices fall after an initial run-up. This 'bubble' in stock prices is observable ex post but …
Persistent link: https://www.econbiz.de/10005067467
We survey the recent literature on learning in financial markets. Our main theme is that many financial market phenomena that appear puzzling at first sight are easier to understand once we recognize that parameters in financial models are uncertain and subject to learning. We discuss phenomena...
Persistent link: https://www.econbiz.de/10005661697
for low inflation in both decades. The uncanny parallel of the stock market boom, bubble, and collapse in 1995-2001 as in …
Persistent link: https://www.econbiz.de/10005792478
Not necessarily. The fundamental value of a firm increases with uncertainty about average future profitability, and this uncertainty was unusually high in the late 1990s. We calibrate a stock valuation model that includes this uncertainty, and show that the uncertainty needed to match the...
Persistent link: https://www.econbiz.de/10005123974
evidence for a recent bubble is found. …
Persistent link: https://www.econbiz.de/10005124041
Can monetary policy trigger pronounced boom-bust cycles in house prices and create persistent business cycles? We address this question by building heuristics into an otherwise standard DSGE model. As a result, monetary policy sets off waves of optimism and pessimism ('animal spirits') that...
Persistent link: https://www.econbiz.de/10011084289