Asset Prices, Leverage and Portfolio Rebalancing Drive Global Capital Flows Cycle
Abstract: The amount of leverage—borrowed funds relative to the value of underlying assets—increases for risky holdings during downturns, motivating their ultimate sale to achieve a more secure financial position. The opposite occurs during upswings, as risky assets gain favor.
File format is text/html
Description: Full text
Provider: Federal Reserve Bank of Dallas
Source: Dallas Fed Economics
Publication Date: 2021-11-30