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Monetary policy, asset prices and macroeconomic conditions : a panel-VAR study

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Author Info
Katrin Assenmacher-Wesche () (Swiss National Bank, Research Department)
Stefan Gerlach () (Goethe University Frankfurt, Institute for Monetary and Financial Stability)

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Abstract

This paper studies the relationships between inflation, economic activity, credit, monetary policy, and residential property and equity prices in 17 OECD countries, using quarterly data for 1986-2006. Using a panel VAR, we find plausible and significant responses to a monetary policy shock. Shocks to asset prices have a positive, significant effect on GDP and credit after three to four quarters, whereas prices start to increase much later. We also consider the transmission of US shocks from the US to the other economies. While monetary policy shocks are transmitted internationally, other shocks are not, perhaps because of the form of coefficient restrictions used.

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Publisher Info
Paper provided by National Bank of Belgium in its series Research series with number 200810-24.

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Length: 39 pages
Date of creation: Oct 2008
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Handle: RePEc:nbb:reswpp:200810-24

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Related research
Keywords: asset prices; credit; monetary policy; panel VAR;

Find related papers by JEL classification:
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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  1. Tuomas A. Peltonen & Ricardo M. Sousa & Isabel S. Vansteenkiste, 2009. "Fundamentals, Financial Factors and The Dynamics of Investment in Emerging Markets," NIPE Working Papers 19/2009, NIPE - Universidade do Minho. [Downloadable!]
  2. Demary, Markus, 2009. "The Link between Output, Inflation, Monetary Policy and Housing Price Dynamics," MPRA Paper 15978, University Library of Munich, Germany. [Downloadable!]
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This page was last updated on 2009-11-25.


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