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Liquidity, inflation and asset prices in a time-varying framework for the euro area

  • Christiane Baumeister

    ()

    (Ghent University)

  • Eveline Durinck

    ()

    (Ghent University)

  • Gert Peersman

    ()

    (Ghent University)

In this paper, we investigate how the dynamic effects of excess liquidity shocks on economic activity, asset prices and inflation differ over time. We show that the impact varies considerably over time, depends on the source of increased liquidity (M1, M3-M1 or credit) and the underlying state of the economy (asset price boom-bust, business cycle, inflation cycle, credit cycle and monetary policy stance).

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File URL: https://www.nbb.be/doc/oc/repec/reswpp/wp142en.pdf
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Paper provided by National Bank of Belgium in its series Working Paper Research with number 142.

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Length: 55 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:nbb:reswpp:200810-17
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