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Determinants Of Cross-Border Financial Capital Flows In East Asia
Determinants Of Cross-Border Financial Capital Flows In East Asia

... market economies, it is essential to ask how they are linked to the global financial markets, particularly those of the U.S. and Japan. An answer to this question may provide a clue to understanding why East Asian financial markets are so susceptible to the global financial market shocks. As shown i ...
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NBER WORKING PAPER SERIES George M. Constantinides
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... The direct antecedents of our work are the models in Feldstein et al. (2001), Smetters (1998, 2001), and Pennacchi (1999). These papers evaluate a “benefits guarantee” or put in the context of partial equilibrium models that take as fixed the distribution of equilibrium returns. In related work, Abe ...
An Evaluation of Money Market Fund Reform Proposals
An Evaluation of Money Market Fund Reform Proposals

... financial crisis. The crisis exposed important structural vulnerabilities in the system that have been the subject of regulatory debate ever since. The debate over money market mutual fund (MMF) reform in the US highlights two competing schools of regulatory thought. The first school argues that MMF ...
Emerging Countries Sovereign Rating Adjustment using Market
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... Paget-Blanc(2006)[19], and many others. Cantor and Packer(1996)[6] have shown that Moody’s and S&P’s ratings can be explained by a number of well-defined economic criteria. Ferri et al.(1999)[12] used these indicators to compare the ratings pre- and post- East Asian crisis. They reached the conclus ...
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... There has been little growth of the Japanese economy since the start of 1990, which means that there has been little growth in corporate profitability. This helps to explain the poor returns of the stock market. Since this poor growth and equity returns have happened at the same time as the Japanese ...
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... portfolio choices of a Bayesian investor who views the simulated data. In contrast, our study bases its inference on the historical time series of returns and predictor variables. We ask whether an investor whose priors imply skepticism about the existence of predictability would find it optimal to ...
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... account (provided that there are no errors and omissions, IMF, 1993).9 As it is our goal to consider financial inflows and outflows separately as well as net balances from the different investment categories, we also analyse financial account data. In the IMF’s (1993) definition, the financial accou ...
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... speculative variance. First, new assets lead to new disagreements because they are associated with new uncertainties. Second, and perhaps more importantly, new assets also amplify speculation on existing disagreements. To illustrate the second channel, Theorem 1 shows that new assets increase the sp ...
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... advanced economies. The risk of protracted low inflation or deflation compounds the prospect of ongoing recovery in many advanced economies, especially in Europe. Third, the scale of geopolitical tensions has risen in recent times, which may stress many markets including the oil market. Fourth, the ...
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... This sets off a spiral (positive feedback loop) manifesting itself as a decreasing ability to recognise risk, trend growth in asset prices, weakened external financial constraints and high investment activity supported by output growth, increased revenue growth and improved profitability. In the backg ...
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... A larger number of firms increase rivalry because more firms must compete for the same customers and resources. Slow market growth causes firms to fight for market share. High fixed costs result in an economy of scale effect that increases rivalry. High storage costs or highly perishable products ca ...
NBER WORKING PAPER SERIES INTERNATIONAL RESERVES MANAGEMENT AND THE CURRENT ACCOUNT
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... corrected via a reduction in aggregate expenditures, imposing adjustment costs. As greater trade openness increases the exposure to trade shocks, minimizing adjustment costs requires higher reserve holdings. The rapid financial integration of developing countries, and the financial crises of the 199 ...
NBER WORKING PAPER SERIES INEFFICIENT INVESTMENT WAVES Zhiguo He Péter Kondor
NBER WORKING PAPER SERIES INEFFICIENT INVESTMENT WAVES Zhiguo He Péter Kondor

... afterwards. These investment cycles are in the forefront of the academic and policy debate. Can these investment cycles be caused by financing frictions only? Are they inefficient, i.e., is there overinvestment in booms and/or underinvestment in downturns? Relatedly, should the policy maker interven ...
MSN Money Articles By Michael Burry 2000/2001
MSN Money Articles By Michael Burry 2000/2001

... believer  that  it  is  a  dog  eat  dog  world  out  there.  And  while  I  do  not  acknowledge  market  efficiency,  I  do  not  believe   the  market  is  perfectly  inefficient  either.  Insiders  leak  information.  Analysts  di ...
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Financial economics

Financial economics is the branch of economics characterized by a ""concentration on monetary activities"", in which ""money of one type or another is likely to appear on both sides of a trade"". Its concern is thus the interrelation of financial variables, such as prices, interest rates and shares, as opposed to those concerning the real economy. It has two main areas of focus: asset pricing (or ""investment theory"") and corporate finance; the first being the perspective of providers of capital and the second of users of capital.The subject is concerned with ""the allocation and deployment of economic resources, both spatially and across time, in an uncertain environment"". It therefore centers on decision making under uncertainty in the context of the financial markets, and the resultant economic and financial models and principles, and is concerned with deriving testable or policy implications from acceptable assumptions. It is built on the foundations of microeconomics and decision theory.Financial econometrics is the branch of financial economics that uses econometric techniques to parameterise these relationships. Mathematical finance is related in that it will derive and extend the mathematical or numerical models suggested by financial economics. Note though that the emphasis there is mathematical consistency, as opposed to compatibility with economic theory.Financial economics is usually taught at the postgraduate level; see Master of Financial Economics. Recently, specialist undergraduate degrees are offered in the discipline.Note that this article provides an overview and survey of the field: for derivations and more technical discussion, see the specific articles linked.
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