Ilut, Cosmin L.; Christiano, Lawrence J.; Motto, Roberto; … - Duke University, Department of Economics - 2010
Historical data and model simulations support the following conclusion. Inflation is low during stock market booms, so … that an interest rate rule that is too narrowly focused on inflation destabilizes asset markets and the broader economy … role for credit growth (beyond its role in constructing the inflation forecast) would reduce the volatility of output and …