Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/52945
Authors: 
FitzGerald, Valpy
Year of Publication: 
2002
Series/Report no.: 
WIDER Discussion Papers // World Institute for Development Economics (UNU-WIDER) 2002/80
Abstract: 
This paper addresses the nature of the demand schedule for emerging market assets in both its macroeconomic and microeconomic dimensions. The former is usually analysed in terms of the ‘push factors’ (such as interest rates or contagion) determining international capital flows; while the latter is normally approached through the portfolio composition decisions (such as herding or risk appetite) of investment managers. Bringing these two perspectives together contributes to an understanding of how sudden shifts in the demand schedule can cause large and asymmetric shocks for emerging market countries. Official interventions by agencies such as the IMF focus on ‘supply’ interventions (such as improving information or avoiding default) and neglect the need to stabilise demand. The paper suggests that official intervention is required in order to stabilise and lengthen demand schedules, and thus construct an orderly international market in emerging market assets.
Subjects: 
asset demand
international finance
capital flows
emerging markets
financial stability
JEL: 
F21
F32
F33
G15
O19
ISBN: 
9291902853
Document Type: 
Working Paper

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