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Global risks from rising debt and asset prices

Den Haan, Wouter, Ilzetzki, Ethan and Ellison, Martin (2017) Global risks from rising debt and asset prices. LSE Business Review (16 Oct 2017). Website.

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Wolfgang Schäuble, the outgoing German finance minister, warned in an FT interview last week that ‘economists all over the world are concerned about the increased risks arising from the accumulation of more and more liquidity and the growth of public and private debt.’ This follows an assessment by the Bank of International Settlements, whose chief economist, Claudio Borio, has tied inflated asset values to loose monetary policy: ‘We do not fully understand the factors at work. But surely the unprecedented gradual pace of monetary policy normalisation has played a role. Another factor could be market participants’ belief that central banks will not remain on the sidelines should unwarranted market tensions rise. All this underlines how much asset prices appear to depend on the very low bond yields that have prevailed for so long.’

Item Type: Online resource (Website)
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Additional Information: © 2017 The Author(s)
Divisions: LSE
Subjects: H Social Sciences > HG Finance
Date Deposited: 15 Nov 2017 12:12
Last Modified: 16 May 2024 09:15

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