Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/144330
Authors: 
Bruggeman, Annick
Year of Publication: 
2007
Series/Report no.: 
Working Paper Research 117
Abstract: 
This paper analyses the relationship between the prevailing liquidity conditions (such as measures of money, credit and interest rates) and developments in asset prices from a monetary analysis perspective. After having identified periods of sustained excess liquidity, we analyse under which conditions they are more likely to be followed by an asset price boom. The results from a descriptive analysis of the developments in a number of macroeconomic and financial variables suggest that periods of sustained excess liquidity that are accompanied by strong economic activity, low interest rates, high real credit growth and low inflation have a higher likelihood of being followed by an asset price boom. This conclusion is also confirmed by a logit analysis.
Subjects: 
excess liquidity
asset prices
logit model
JEL: 
E41
E51
E52
Document Type: 
Working Paper

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