Should Monetary Policy respond to Asset Price Bubbles? Revisiting the Debate
We argue that central banks can improve macroeconomic performance by reacting to asset price misalignments over and above their reaction to fixed horizon inflation forecasts. This is because such countercyclical monetary policy tends to offset the impact on output and inflation of such bubbles. In addition, if it were know ex ante that monetary policy would LATW in this way, it might reduce the probability of bubbles arising at all.
(This abstract was borrowed from another version of this item.)
|This chapter was published in: ||This item is provided by SUERF - The European Money and Finance Forum in its series Chapters in SUERF Studies with number
51-3.||Handle:|| RePEc:erf:erfssc:51-3||Contact details of provider:|| Postal: SUERF c/o OeNB, Otto-Wagner-Platz 3, A-1090 Vienna, Austria|
Phone: +43/1/404 20 7216
Fax: +43/1/404 20 7298
Web page: http://www.suerf.org
More information through EDIRC
|Order Information:|| Postal: SUERF c/o OeNB, Otto-Wagner-Platz 3, A-1090 Vienna, Austria|
References listed on IDEAS
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.:
- Orazio Mastroeni, 2001. "Pfandbrief-style products in Europe," BIS Papers chapters, in: Bank for International Settlements (ed.), The changing shape of fixed income markets: a collection of studies by central bank economists, volume 5, pages 44-66 Bank for International Settlements.
When requesting a correction, please mention this item's handle: RePEc:erf:erfssc:51-3. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dragana Popovic)
If references are entirely missing, you can add them using this form.