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Politique monétaire et prix des actifs: le cas des Etats-Unis

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  • Quentin Wibaut

    ()
    (National Bank of Belgium, Research Department)

Abstract

This working paper gives an overview of the current debate on monetary policy reactions to asset prices, focusing on the developments on equity markets in the United States. It first describes the main causes and consequences of these developments and then surveys the pros and cons of a monetary policy reaction. The standard approach relying on the Gordon-Shapiro equation fails to justify the current high price levels on US stock markets. Several limits to Gordon-Shapiro's perfect competition model are proposed in order to explain the gap between observed and "justified" data. Equity prices affect investment and consumption through several channels. Although monetary policy should not ignore asset price fluctuations, it is fairly generally thought that it should take them into account only in so far as they affect inflation.

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File URL: http://www.nbb.be/doc/oc/repec/docwpp/WP11.pdf
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Bibliographic Info

Paper provided by National Bank of Belgium in its series Working Paper Document with number 11.

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Length: 56 pages
Date of creation: Aug 2000
Date of revision:
Handle: RePEc:nbb:docwpp:200008-3

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References

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  1. Ben Bernanke & Mark Gertler, 1999. "Monetary policy and asset price volatility," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 77-128.
  2. Bayoumi, Tamim, 1993. "Financial Deregulation and Household Saving," Economic Journal, Royal Economic Society, vol. 103(421), pages 1432-43, November.
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  4. Deaton, A., 1989. "Saving And Liquidity Constraints," Papers 153, Princeton, Woodrow Wilson School - Public and International Affairs.
  5. Paul Masson, 2000. "Fiscal policy and growth in the context of European integration," Working Paper Research 07, National Bank of Belgium.
  6. Zeldes, Stephen P, 1989. "Consumption and Liquidity Constraints: An Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 305-46, April.
  7. Laurence Boone & Claude Giorno & Pete Richardson, 1998. "Stock Market Fluctuations and Consumption Behaviour: Some Recent Evidence," OECD Economics Department Working Papers 208, OECD Publishing.
  8. Mike Kennedy & Angel Palerm & Charles Pigott & Flavia Terribile, 1998. "Asset Prices and Monetary Policy," OECD Economics Department Working Papers 188, OECD Publishing.
  9. Steven A. Sharpe, 1999. "Stock prices, expected returns, and inflation," Finance and Economics Discussion Series 1999-02, Board of Governors of the Federal Reserve System (U.S.).
  10. R. Glenn Hubbard, 1997. "Capital-Market Imperfections and Investment," NBER Working Papers 5996, National Bureau of Economic Research, Inc.
  11. Ben S. Bernanke & Mark Gertler, 1995. "Inside the Black Box: The Credit Channel of Monetary Policy Transmission," NBER Working Papers 5146, National Bureau of Economic Research, Inc.
  12. John Laitner & F. Thomas Juster, 1993. "New evidence on altruism: a study of TIAA-CREF retirees," Discussion Paper / Institute for Empirical Macroeconomics 86, Federal Reserve Bank of Minneapolis.
  13. Alchian, Armen A & Klein, Benjamin, 1973. "On a Correct Measure of Inflation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 5(1), pages 173-91, Part I Fe.
  14. Bhatia, Kul B, 1972. "Capital Gains and the Aggregate Consumption Function," American Economic Review, American Economic Association, vol. 62(5), pages 866-79, December.
  15. Horioka, C.Y., 1995. "Capital Gains in Japan: Their Magnitude and Imact on Consumption," ISER Discussion Paper 0388, Institute of Social and Economic Research, Osaka University.
  16. John Vickers, 2000. "Monetary union and economic growth," Working Paper Research 10, National Bank of Belgium.
  17. Visco, I., 2000. "Knowledge, Technology and Economic Growth: an OECD Perspective," Papers 6, Warwick - Development Economics Research Centre.
  18. Raf Wouters & Michel Dombrecht, 2000. "Model-based inflation forecasts and monetary policy rules," Working Paper Research 01, National Bank of Belgium.
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Citations

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Cited by:
  1. Johan Devriese & Janet Mitchell, 2005. "Liquidity risk in securities settlement," Working Paper Research 72, National Bank of Belgium.
  2. Helga De Doncker, 2006. "R&D in the Belgian Pharmaceutical Sector," Working Paper Document 106, National Bank of Belgium.
  3. Patrick BISCIARI & Alain DURRE & Alain NYSSENS, 2003. "Stock Market Valuation In The United States," Finance 0312011, EconWPA.
  4. Frédéric Lagneaux, 2004. "Importance économique du Port Autonome de Liège: rapport 2002," Working Paper Document 64, National Bank of Belgium.
  5. Frédéric Lagneaux, 2008. "Economic Importance of Belgian Transport Logistics," Working Paper Document 125, National Bank of Belgium.
  6. Frédéric Lagneaux, 2004. "Economic importance of the Flemish maritime ports: Report 2002," Working Paper Document 56, National Bank of Belgium.
  7. Frédéric Lagneaux, 2005. "Importance économique du Port Autonome de Liège: rapport 2003," Working Paper Document 75, National Bank of Belgium.
  8. François Coppens & David Vivet, 2006. "The single European electricity market: A long road to convergence," Working Paper Document 84, National Bank of Belgium.
  9. Nancy Masschelein, 2007. "Monitoring pro-cyclicality under the capital requirements directive : preliminary concepts for developing a framework," Working Paper Document 120, National Bank of Belgium.
  10. Helga De Doncker, 2006. "Crédits aux particuliers - Analyse des données de la Centrale des Crédits aux Particuliers," Working Paper Document 78, National Bank of Belgium.
  11. A. Bruggeman & M. Hradisky & V. Périlleux, 2005. "Share prices, house prices and monetary policy," Economic Review, National Bank of Belgium, issue III, pages 65-78, September.
  12. Jean-Jacques Vanhaelen & Luc Dresse & Jan De Mulder, 2000. "The Belgian industrial confidence indicator: leading indicator of economic activity in the euro area ?," Working Paper Document 12, National Bank of Belgium.
  13. Janet Mitchell, 2005. "Financial intermediation theory and implications for the sources of value in structured finance markets," Working Paper Document 71, National Bank of Belgium.
  14. François Coppens & David Vivet, 2004. "Liberalisation of network industries : Is the electricity sector an exception to the rule?," Working Paper Document 59, National Bank of Belgium.

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