Distress Selling and Asset Market Feedback

  1. Ilhyock Shim1 and
  2. Goetz Von Peter2

Article first published online: 21 NOV 2007

DOI: 10.1111/j.1468-0416.2007.00126.x

Issue

Financial Markets, Institutions & Instruments

Financial Markets, Institutions & Instruments

Volume 16, Issue 5, pages 243–291, December 2007


Additional Information

How to Cite

Shim, I. and Von Peter, G. (2007), Distress Selling and Asset Market Feedback. Financial Markets, Institutions & Instruments, 16: 243–291. doi: 10.1111/j.1468-0416.2007.00126.x

Author Information

  1. 1

    Stanford University and Seoul National University

  2. 2

    Columbia University and London School of Economics

*Ilhyock Shim, Economist, Representative Office for Asia and the Pacific, Bank for International Settlements, 78/F Two International Finance Center, 8 Finance Street, Central, Hong Kong; Tel: +852-2878-7147; Fax: +852-2878-7123; E-mail: ilhyock.shim@bis.org

Publication History

  1. Issue published online: 21 NOV 2007
  2. Article first published online: 21 NOV 2007

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This paper examines the process of distress selling and asset market feedback. It splits this process into several stages, in order to analyze what triggers distress selling, why asset prices fall, and how falling prices generate additional rounds of selling. This framework enables us to understand and compare models relevant to distress selling from diverse literatures. The paper also considers what policy options are available at each stage to mitigate the adverse economic consequences of distress selling and asset market feedback.

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