01942cas a2200241 a 4500 AALejournalIMF006692 230101c9999 xx r poo 0 0eng d 5.00 USD 9781455205264 1018-5941 BD-DhAAL BD-DhAAL Darius, Reginald. Can Global Liquidity Forecast Asset Prices? / Reginald Darius. Washington, D.C. : International Monetary Fund, 2010. 1 online resource (25 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students During the period leading up to the global financial crisis many asset classes registered rapid price increases. This coincided with a significant rise in global liquidity. This paper attempts to determine the extent to which the rise in asset prices was influenced by developments in global liquidity. We confirm that global liquidity had a significant impact on the buildup in house prices; however, the impact on equity prices was limited. In contrast to common perception, we find that the impact of global liquidity declined during the period of the Great Moderation. The paper also examines spillovers from global liquidity to domestic variables and concludes that domestic factors generally played a more significant role in house price appreciation relative to global factors. This contradicts the hypothesis of weakened potency of domestic monetary policy in the presence of increased international liquidity. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2010/196 Full text available on IMF http://elibrary.imf.org/view/journals/001/2010/196/001.2010.issue-196-en.xml IMF e-Library