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Money is the root of asset bubbles
Awaya, Yu; Iwasaki, Kohei; Watanabe, Makoto - 2024
not created due to a hold-up problem. Monetary expansion increases buyers' money holdings, and then, dealers are willing …
Persistent link: https://www.econbiz.de/10014467370
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What Our Market Return Forecasts Really Mean : Convexity in Equity Returns and its Implications for Investment Sizing
Haghani, Victor - 2019
You're probably familiar, at least in passing, with the 'convexity' of long-term bonds - i.e. that yields dropping 1% produce a bigger price move than yields rising 1%. A significant amount of brainpower has gone into understanding all the ramifications of this convexity in the fixed income...
Persistent link: https://www.econbiz.de/10012902324
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Optimal Trade Sizing in a Game with Favourable Odds : The Stock Market
Haghani, Victor - 2016
In this short note, we show investors one way to calculate ideal investment sizing by using two rules of thumb based on a simple outline of individual risk aversion. We illustrate these two heuristics, which are not widely appreciated, with thought experiments involving coin flips and ketchup &...
Persistent link: https://www.econbiz.de/10012978604
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Who is the Biggest Investor in the Stock Market, and Why Should You Care?
White, James; Haghani, Victor - 2021
The US Treasury effectively ”owns” about 24% of the stocks held by high income US taxable investors. Through the capital gains tax, Uncle Sam has an effective exposure of more than $1 trillion of equities. And this huge-but-silent investor might be about to get a lot bigger if capital gains...
Persistent link: https://www.econbiz.de/10013235049
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When (If Ever) Has it Paid to Wait for a Stock Market Correction?
Haghani, Victor - 2017
Investors are periodically challenged with this question: with funds ready to invest, but faced with a market that is generally perceived to be expensive, is it better to wait for a market correction before investing? Many investors are certain that a correction must be around the corner, and...
Persistent link: https://www.econbiz.de/10012947040
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The Revived Bretton Woods System, Liquidity Creation, and Asset Price Bubbles
Dellas, Harris - 2013
In this article, we argue that the present constellation of exchange rate arrangements among the major currencies has led to the creation of excessive global liquidity, which has contributed to asset price bubbles. Although the exchange rates of many of the major currencies — including the...
Persistent link: https://www.econbiz.de/10013083537
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Payments, Credit and Asset Prices
Piazzesi, Monika - 2018
This paper studies a modern monetary economy: trade in both goods and securities relies on money provided by … intermediaries. While money is valued for its liquidity, its creation requires costly leverage. Inflation, security prices and the … if it helps back inside money, and lower if more inside money is used to trade it. Inflation can be low in security …
Persistent link: https://www.econbiz.de/10012914919
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Turnover Liquidity and the Transmission of Monetary Policy
Lagos, Ricardo - 2019
We provide empirical evidence of a novel liquidity-based transmission mechanism through which monetary policy influences asset markets, develop a model of this mechanism, and assess the ability of the quantitative theory to match the evidence
Persistent link: https://www.econbiz.de/10012903365
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Pairwise trade, asset prices, and monetary policy
Nosal, Ed; Rocheteau, Guillaume - In: Journal of economic dynamics & control 37 (2013) 1, pp. 1-17
Persistent link: https://www.econbiz.de/10009703616
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Limited Market Participation and Asset Prices in the Presence of Earnings Management
Sun, Bo - 2011
We examine the role of earnings management in explaining the properties of asset prices and stock market participation. We demonstrate that investors' uncertainty about the extent of manipulation can cause excess movements in stock price relative to fluctuations in output. When faced with...
Persistent link: https://www.econbiz.de/10013122199