TY  - JOUR
AU  - Caballero,Ricardo J.
TI  - On the Macroeconomics of Asset Shortages
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12753
PY  - 2006
Y2  - December 2006
UR  - http://www.nber.org/papers/w12753
L1  - http://www.nber.org/papers/w12753.pdf
N1  - Author contact info:
Ricardo J. Caballero
MIT
Department of Economics
Room E52-373a
Cambridge, MA 02142-1347
Tel: 617/253-0489
Fax: 617/253-6915
E-Mail: caball@mit.edu
AB  - The world has a shortage of financial assets. Asset supply is having a hard time keeping up with the global demand for store of value and collateral by households, corporations, governments, insurance companies, and financial intermediaries more broadly. The equilibrium response of asset prices and valuations to these shortages has played a central role in global economic developments over the last twenty years. The so-called "global imbalances," the recurrent emergence of speculative bubbles (which recently have transited from emerging markets, to the dot-coms, to real estate, to gold...), the historically low real interest rates and associated "interest-rate conundrum," and even the widespread low inflation environment and deflationary episodes in parts of the world, all fall into place once one adopts this asset shortage perspective.
ER  -