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Monetary policy as bad medicine: The volatile relationship between business cycles and asset prices

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  • Philipp Bagus

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Suggested Citation

  • Philipp Bagus, 2008. "Monetary policy as bad medicine: The volatile relationship between business cycles and asset prices," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 21(4), pages 283-300, December.
  • Handle: RePEc:kap:revaec:v:21:y:2008:i:4:p:283-300
    DOI: 10.1007/s11138-008-0042-8
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    References listed on IDEAS

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    1. Gunther Schnabl & Andreas Hoffmann, 2008. "Monetary Policy, Vagabonding Liquidity and Bursting Bubbles in New and Emerging Markets: An Overinvestment View," The World Economy, Wiley Blackwell, vol. 31(9), pages 1226-1252, September.
    2. Koppl, Roger & Yeager, Leland B., 1996. "Big Players and Herding in Asset Markets: The Case of the Russian Ruble," Explorations in Economic History, Elsevier, vol. 33(3), pages 367-383, July.
    3. David Laidler, 2003. "The price level, relative prices and economic stability: aspects of the interwar debate," BIS Working Papers 136, Bank for International Settlements.
    4. David Gruen & Michael Plumb & Andrew Stone, 2005. "How Should Monetary Policy Respond to Asset-Price Bubbles?," International Journal of Central Banking, International Journal of Central Banking, vol. 1(3), December.
    5. Lars E. O. Svensson, 2002. "Monetary policy and real stabilization," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 261-312.
    6. Conrad, Christian A. & Stahl, Markus, 2002. "Asset-Preise als geldpolitische Zielgröße: Das Beispiel der USA," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 82(8), pages 486-493.
    7. Ahmed, Ehsan & Koppl, Roger & Rosser, J. Jr. & White, Mark V., 1997. "Complex bubble persistence in closed-end country funds," Journal of Economic Behavior & Organization, Elsevier, vol. 32(1), pages 19-37, January.
    8. Michael D. Bordo & David C. Wheelock, 2004. "Monetary policy and asset prices: a look back at past U.S. stock market booms," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 19-44.
    9. William R. White, 2006. "Is price stability enough?," BIS Working Papers 205, Bank for International Settlements.
    10. Ben S. Bernanke & Mark Gertler, 1999. "Monetary policy and asset price volatility," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 17-51.
    11. Koppl, Roger & Mramor, Dusan, 2003. "Big Players in Slovenia," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 16(2-3), pages 253-269, September.
    12. Scharfstein, David S & Stein, Jeremy C, 1990. "Herd Behavior and Investment," American Economic Review, American Economic Association, vol. 80(3), pages 465-479, June.
    13. William Butos & Roger Koppl, 1993. "Hayekian expectations: Theory and empirical applications," Constitutional Political Economy, Springer, vol. 4(3), pages 303-329, September.
    14. Keeler, James P, 2001. "Empirical Evidence on the Austrian Business Cycle Theory," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 14(4), pages 331-351, December.
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    Citations

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    Cited by:

    1. David Howden, 2010. "Knowledge shifts and the business cycle: When boom turns to bust," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 23(2), pages 165-182, June.
    2. Philipp Bagus & David Howden, 2011. "Monetary equilibrium and price stickiness: Causes, consequences and remedies," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 24(4), pages 383-402, December.
    3. Jimmy A. Saravia, 2013. "Merger waves and the Austrian business cycle theory," DOCUMENTOS DE TRABAJO CIEF 010929, UNIVERSIDAD EAFIT.
    4. Bagus, Philipp & Gabriel, Amadeus & Howden, David, 2014. "Causes and Consequences of Inflation," MPRA Paper 79608, University Library of Munich, Germany.
    5. Malte Tobias Kähler, 2011. "From German Rules to European Discretion: Policy’s Slippery Slope," Chapters,in: Institutions in Crisis, chapter 9 Edward Elgar Publishing.
    6. Bagus, Philipp & Howden, David, 2011. "Unanswered Quibbles with Fractional Reserve Free Banking," MPRA Paper 79594, University Library of Munich, Germany.
    7. repec:kap:jbuset:v:142:y:2017:i:2:d:10.1007_s10551-015-2706-1 is not listed on IDEAS
    8. Philipp Bagus & David Howden, 2009. "The Legitimacy of Loan Maturity Mismatching: A Risky, but not Fraudulent, Undertaking," Journal of Business Ethics, Springer, vol. 90(3), pages 399-406, December.
    9. Philipp Bagus & David Howden, 2012. "Still unanswered quibbles with fractional reserve free banking," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 25(2), pages 159-171, June.
    10. Hoffmann, Andreas, 2009. "Fear of depression - Asymmetric monetary policy with respect to asset markets," MPRA Paper 17522, University Library of Munich, Germany.
    11. Bagus, Philipp & Howden, David, 2010. "Fractional Reserve Banking: Some Quibbles," MPRA Paper 79590, University Library of Munich, Germany.
    12. Bagus, Philipp & Howden, David, 2013. "Some Ethical Dilemmas with Modern Banking," MPRA Paper 79599, University Library of Munich, Germany.
    13. Philipp Bagus & Juan Julián & Miguel Neira, 2014. "A free market bailout alternative?," European Journal of Law and Economics, Springer, vol. 37(3), pages 405-419, June.
    14. Edith Skriner, 2011. "Did Asset Prices Cause the Current Crisis?," Chapters,in: The First Great Recession of the 21st Century, chapter 9 Edward Elgar Publishing.

    More about this item

    Keywords

    Austrian business cycle theory; Asset prices; Asset price bubbles; Monetary policy; Credit expansion; Herding behavior; B53 — Austrian Economics; E32 — Business Cycles; E44 — Financial Markets and the Macroeconomy; E58 — Central Banks and their Policies;

    JEL classification:

    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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