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Monetary policy and asset price volatility

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  • Ben Bernanke
  • Mark Gertler

Abstract

Over the past twenty years the world's major central banks have been largely successful at bringing inflation under control. While it is premature to suggest that inflation is no longer an issue of great concern, it is quite conceivable that the next battles facing central bankers will lie on a different front. One development that has already concentrated the minds of policymakers is an apparent increase in financial instability, of which one important dimension is increased volatility of asset prices.> In a presentation at the Federal Reserve Banks of Kansas City's 1999 symposium, "New Challenges for Monetary Policy," Bernanke and Gertler examined the role that asset prices should play in monetary policy. They concentrated on three issues: why policymakers should care about asset price volatility, how asset price volatility affects the economy, and how monetary policy should respond to changes in asset prices.

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Bibliographic Info

Article provided by Federal Reserve Bank of Kansas City in its journal Economic Review.

Volume (Year): (1999)
Issue (Month): Q IV ()
Pages: 17-51

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Handle: RePEc:fip:fedker:y:1999:i:qiv:p:17-51:n:v.84no.4

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Keywords: Monetary policy ; Banks and banking; Central;

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Professor Bernanke vs Central Banker Bernanke
    by Amol Agrawal in Mostly Economics on 2010-09-27 09:53:52
  2. Accounting for the Great Recession in the UK: Real Business Cycles and Financial Frictions
    by Christian Zimmermann in NEP-DGE blog on 2012-04-25 12:15:12
  3. Accounting for the Great Recession in the UK: Real Business Cycles and Financial Frictions
    by Christian Zimmermann in NEP-DGE blog on 2012-04-25 12:15:12
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