Castro, Vitor; Sousa, Ricardo M. - Grupo de Estudos Monetários e Financeiros (GEMF), … - 2010
We assess the response of monetary policy to developments in asset markets in the Euro Area, the US and the UK. We … estimate the reaction of monetary policy to wealth composition and asset prices using: (i) a linear framework based on a fully … regression model. The linear framework suggests that wealth composition is indeed important in the formulation of monetary policy …