Caballero, Ricardo J.; Simsek, Alp - 2022
responds to asset prices with a lag. If there is a negative output gap, the central bank optimally overshoots aggregate asset …-monotonic function of the output gap: the asset price boost is low for a deeply negative initial output gap, grows as the output gap … improves over a range, and shrinks toward zero as the output gap improves further. This pattern also implies that good …