Financial market development is important to the economic growth of most emerging economies. The relevance of financial markets is in respect of their ability to affect investments by reducing financial constraints and making capital available to businesses. Well functioning financial markets allow firms to acquire capital to be channeled into profitable projects or invested in response to increased demand for output (Ndikumana, 2003). The comparative merits of stock market-based systems and bank-based systems in mobilizing resources and enhancing economic growth have been debated for some time now (see Levine 2002). However, little is known about financial markets and investment in emerging countries’ perspective. Emerging financial markets are critical considering the role they are expected to play in spurring investment growth in these countries.
This paper contributes to the literature by examining the relative importance of stock market based and debt market-based financial systems in influencing investment opportunities in emerging economies. This study is based on a sample of thirty four countries covering the period 1990 – 2006. The analysis uses a dynamic investment model including lagged investment, indicators of stock market-based and debt-based financial systems, per capita GDP, and other control variables that affect investment opportunities.
The role of housing wealth on economic activity has recently attracted considerable attention among academic researchers, policy makers and press commentators. This attention is partly explained by the sizeable rises in property prices and household indebtedness in several industrialized countries over the recent years (Debelle 2004, Terrones and Otrok 2004), and the need to understand both the determinants of such rises and their potential implications for monetary policy and financial stability. The recent global financial turmoil allegedly originating from the residential property market in the US has strengthened the interest in these matters even further. Beyond the policy considerations, there is a growing interest in assessing the effects of changes in property prices on consumption decisions, given the predominance of housing in total household wealth (Campbell and Cocco 2003, Muellbauer and Murphy 2008).
This paper studies the relationship between the structure of housing finance and the monetary transmission mechanism in several industrialized countries. We first show that there is significant heterogeneity in the institutional characteristics of national mortgage markets across the main industrialized countries, and especially within the EU. Examples of such institutional characteristics include the typical duration of mortgage contracts, the required levels of down%payment (or inverse loan%to%value ratios), the existence (or lack thereof) of equity release products. We interpret these indicators as alternative measures of the degree of development/flexibility of mortgage markets. There is in fact one channel, working from housing finance to the macroeconomy, that we aim at capturing by means of these indicators: the extent to which mortgage contracts allow to translate the value of housing as a collateral into current availability of credit for households. In turn, this credit can be used not only to finance new housing expenditure but also (non housing) consumption.
Although the media is often modeled as a faceless institution, its main output news content is generated by specific people. This is important because unlike, say, making tires or processing paper, writing is a fiercely individualistic craft that allows the author’s style, persuasion, views, or bias to be injected into the finished product. In this paper, we present direct evidence that the writing of specific journalists has a casual effect on aggregate market outcomes.
