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Asset Prices and the Financial Crisis of 2007–09: An Overview of Theories and Policies

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  • Marc Hayford
  • Anastasios Malliaris

Abstract

The financial crisis of 2007--09 has led to a rethinking of the role of monetary and financial regulatory policy. It has also called into question the benefits of financial innovation and monetary policy that focuses solely on inflation and the output gap. This paper discusses financial instabilities in general, the recent financial crisis as well as the appropriate role of monetary and financial regulatory policy in dealing with asset bubbles. The paper concludes by evaluating appropriate policies to reduce the economic impact of future financial crises.
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  • Marc Hayford & Anastasios Malliaris, 2010. "Asset Prices and the Financial Crisis of 2007–09: An Overview of Theories and Policies," Forum for Social Economics, Springer;The Association for Social Economics, vol. 39(3), pages 279-286, October.
    • Handle: RePEc:spr:fosoec:v:39:y:2010:i:3:p:279-286
    DOI: 10.1007/s12143-010-9062-9
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