RIEB, Kobe University - RIEB Seminar (July 22, 2016)

RIEB Seminar (Jointly supported by:Grant-in-Aid for Scientific Research (S))

Date&Time	Friday, July 22, 2016, 5:00pm-6:30pm
Place	Seminar Room at RIEB (Kanematsu Memorial Hall, 1st Floor)
Intended Audience	Faculties, Graduate Students and People with Equivalent Knowledge
Language	English
Note	Copies of the paper will be available at Office of Promoting Research Collaboration.

Speaker	Toan PHAN
Affiliation	Department of Economics, The University of North Carolina at Chapel Hill
Topic	Financial integration and the bubbly savings glut
Abstract	Using a general equilibrium model of two regions with heterogenous levels of financial development, we show that financial globalization can enable risky asset bubbles. Sufficiently risky bubbles exist if and only if the two regions are financially integrated. Furthermore, the only kind of bubbles that can emerge are leveraged and are financed by upstream capital flows. The bubbles result from the combination of the high ability of the North's financial system to collateralize assets and the South's large supply of savings. The model formalizes the widespread narrative that a global savings glut "fueled" the recent U.S. housing bubble.

After Session