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Monetary Policy and Rational Asset Price Bubbles
Galí, Jordi - 2013
I examine the impact of alternative monetary policy rules on a rational asset price bubble, through the lens of an overlapping generations model with nominal rigidities. A systematic increase in interest rates in response to a growing bubble is shown to enhance the fluctuations in the latter,...
Persistent link: https://www.econbiz.de/10012459855
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Monetary Policy and Asset Price Volatility
Bernanke, Ben - 2000
We explore the implications of asset price volatility for the management of monetary policy. We show that it is desirable for central banks to focus on underlying inflationary pressures. Asset prices become relevant only to the extent they may signal potential inflationary or deflationary...
Persistent link: https://www.econbiz.de/10012471216
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Monetary Policy and Asset Prices : A Look Back at Past U.S. Stock Market Booms
Bordo, Michael D. - 2004
This paper examines the economic environments in which past U.S. stock market booms occurred as a first step toward understanding how asset price booms come about and whether monetary policy should be used to defuse booms. We identify several episodes of sustained rapid rise in equity prices in...
Persistent link: https://www.econbiz.de/10012467986
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Boom-Busts in Asset Prices, Economic Instability, and Monetary Policy
Bordo, Michael D. - 2002
The link between monetary policy and asset price movements has been of perennial interest to policy makers. In this paper we consider the potential case for pre-emptive monetary restrictions when asset price reversals can have serious effects on real output. First, we provide some historical...
Persistent link: https://www.econbiz.de/10012469748
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The Effects of Monetary Policy on Stock Market Bubbles : Some Evidence
Gali, Jordi - 2014
"conventional" view on the effects of monetary policy on bubbles, as well as with the predictions of bubbleless models. We also …
Persistent link: https://www.econbiz.de/10012458683
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Does Expansionary Monetary Policy Cause Asset Price Booms; Some Historical and Empirical Evidence
Bordo, Michael D. - 2013
In this paper we investigate the relationship between loose monetary policy, low inflation, and easy bank credit with asset price booms. Using a panel of up to 18 OECD countries from 1920 to 2011 we estimate the impact that loose monetary policy, low inflation, and bank credit has on house,...
Persistent link: https://www.econbiz.de/10012459076
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Bubbles, Crises, and Heterogeneous Beliefs
Xiong, Wei - 2013
individuals, to explain bubbles, crises, and endogenous risk in financial markets …
Persistent link: https://www.econbiz.de/10012459756
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New Evidence on the First Financial Bubble
Frehen, Rik G.P. - 2009
these linked bubbles primarily focus on the irrationality of investor speculation and the corresponding stock price behavior … examine a broad cross-section of security price data to evaluate the causes of the bubbles. Using newly collected stock prices … in 1720. Our findings are consistent with the hypothesis that financial bubbles require a plausible story to justify …
Persistent link: https://www.econbiz.de/10012463318
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Indeterminacy, Bubbles, and the Fiscal Theory of Price Level Determination
McCallum, Bennett T. - 1998
The recently-developed fiscal theory of price level determination contends that there is an important class of policy rules in which there exists a unique rational expectations solution that shows the price level to be dependent upon fiscal policy and independent of monetary variables. The...
Persistent link: https://www.econbiz.de/10012472349
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Monetary Policy and Bubbles in a New Keynesian Model with Overlapping Generations
Galí, Jordi - 2020
rational expectations equilibria with asset price bubbles. I study the conditions under which bubble-driven fluctuations may …
Persistent link: https://www.econbiz.de/10012479320