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Asset inflation and monetary policy

Author

Listed:
  • C.P. KINDLEBERGER

    (Massachusetts Institute of Technology)

Abstract

Asset inflation is characterised by an increase in the prices of assets while output prices are relatively stable or on a decline. In the event of asset inflation, international coordination of monetary policy is an observable trend. For instance, in 1989, when Japan was at the worst phase of the recession, the Bank of Japan lowered interest rates and the US and German discount rates also declined at the same time. However, most mainstream economists believe that monetary policy should be aimed at the stability of the general price level rather than zeroing on asset prices. The nature, importance and historical evolutionary of concern with asset inflation are discussed.

Suggested Citation

  • C.P. Kindleberger, 1995. "Asset inflation and monetary policy," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 48(192), pages 17-37.
    • Handle: RePEc:psl:bnlqrr:1995:12
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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/10552/10437
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. M.A. Akhtar, 1995. "Monetary policy goals and central bank independence," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 48(195), pages 423-439.
    2. Tschoegl, Adrian E., 2002. "Entry and survival: the case of foreign banks in Norway," Scandinavian Journal of Management, Elsevier, vol. 18(2), pages 131-153, June.
    3. Yilmaz AKYüZ, 2005. "Reforming The Imf: Back To The Drawing Board," G-24 Discussion Papers 38, United Nations Conference on Trade and Development.
    4. Yilmaz Akyuz, 2008. "Managing Financial Instability in Emerging Markets: A Keynesian Perspective," Working Papers 2008/4, Turkish Economic Association.
    5. Emmanuel Carré & Laurent Le Maux, 2023. "Bernanke and Kindleberger on financial crises, 1978–2003," Post-Print hal-04201556, HAL.
    6. M.A. Akhtar, 1995. "Monetary policy goals and central bank independence," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 48(195), pages 423-439.
    7. Okina, Kunio & Shirakawa, Masaaki & Shiratsuka, Shigenori, 1999. "Financial Market Globalization: Present and Future," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 17(3), pages 1-40, December.
    8. Claudio Borio & Craig Furfine & Philip Lowe, 2001. "Procyclicality of the financial system and financial stability: issues and policy options," BIS Papers chapters, in: Bank for International Settlements (ed.), Marrying the macro- and micro-prudential dimensions of financial stability, volume 1, pages 1-57, Bank for International Settlements.
    9. Shigenori Shiratsuka, 2011. "A Macroprudential Perspective in Central Banking," IMES Discussion Paper Series 11-E-03, Institute for Monetary and Economic Studies, Bank of Japan.
    10. Claudio E. V. Borio, 2006. "Monetary and prudential policies at a crossroads? New challenges in the new century," BIS Working Papers 216, Bank for International Settlements.
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    More about this item

    Keywords

    Interest rates; Asset-backed securities; Asset backed securities;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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