Savings Gluts and Asset Price Booms in Emerging Economies

摘要: This paper shows that capital outflows from emerging economies after financial integration can lead to simultaneous increases in the savings rate and domestic asset prices. Under autarky, firms invest risky while facing a borrowing constraint creates need for precautionary savings. Financial provides with access foreign risk-free assets results two effects: substitution effect, whereby divert some investments cause outflows; wealth they grow richer equilibrium thus demand more capital. Savings gluts price booms occur when effect dominates. The prices are inefficiently high relative socially optimal level be amplified by heterogeneity productivity among firms.