India: Asset Prices and the Macroeconomy
AbstractThis paper examines rising asset prices in India. For the most part, asset prices in India reflect structural factors but the risk of a correction cannot be ruled out. However, at this juncture monetary policy may not be the most effective tool to safeguard financial stability because (i) India's economy is undergoing rapid structural change making it difficult to identify price misalignments; (ii) the macroeconomic impact of an asset price correction is likely to be small; and (iii) the relationship between monetary policy and asset prices is also weak. Targeted changes in financial regulations are better tools to address potential risks.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 07/221.
Date of creation: 01 Sep 2007
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-03 (All new papers)
- NEP-CWA-2007-11-03 (Central & Western Asia)
- NEP-DEV-2007-11-03 (Development)
- NEP-MAC-2007-11-03 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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