Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/26145 
Year of Publication: 
2007
Series/Report no.: 
CESifo Working Paper No. 2100
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Credit 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, the 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.
JEL: 
B53
E32
E44
E52
Document Type: 
Working Paper
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