This PDF is a selection from a published volume from... Research Volume Title: Asset Prices and Monetary Policy
... the conduct of monetary policy to the extent that these asset bubbles affect the growth/inflation outlook. 2. The monetary authorities should be there to “clean up” after bubbles burst, both to prevent systemic problems and undesired downward pressure on economic activity or inflation. Relative to th ...
... the conduct of monetary policy to the extent that these asset bubbles affect the growth/inflation outlook. 2. The monetary authorities should be there to “clean up” after bubbles burst, both to prevent systemic problems and undesired downward pressure on economic activity or inflation. Relative to th ...
Nearly seven years have passed since the last reces-
... prick a suspected bubble could send the economy into a recession, thereby forgoing the benefits of the boom that might otherwise continue. In light of the severe economic fall-out from recent bubble episodes, this Economic Letter examines the potential role of monetary policy in responding to asset ...
... prick a suspected bubble could send the economy into a recession, thereby forgoing the benefits of the boom that might otherwise continue. In light of the severe economic fall-out from recent bubble episodes, this Economic Letter examines the potential role of monetary policy in responding to asset ...
presentation - People`s Health Movement
... the real economy to bail out the financial system • ratchet effect: finance expands in the boom; the real economy contracts in the bust • Even if we can find our way out of this crisis, it will only lay the ground for the next ...
... the real economy to bail out the financial system • ratchet effect: finance expands in the boom; the real economy contracts in the bust • Even if we can find our way out of this crisis, it will only lay the ground for the next ...
Only One Clear Winner (October 2010)
... The aggressive monetary policy followed by the U.S. policymakers is central in both processes. The necessary adjustments are difficult to accomplish, especially if accompanied by immediate losses for the countries concerned. Export-orientated economies whose currencies have appreciated against the d ...
... The aggressive monetary policy followed by the U.S. policymakers is central in both processes. The necessary adjustments are difficult to accomplish, especially if accompanied by immediate losses for the countries concerned. Export-orientated economies whose currencies have appreciated against the d ...
Credit Crunch - Vincent Hogan
... • Current crisis is more than a credit crunch in Ireland • 4 Aspects or causes with effect on AD – Asset market Bubble: I – Government Budget: G ...
... • Current crisis is more than a credit crunch in Ireland • 4 Aspects or causes with effect on AD – Asset market Bubble: I – Government Budget: G ...
Presentation - International Development Economics Associates
... • “…the source of macroeconomic instability now is not instability in product markets but asset markets, and the main challenge for policy makers is not inflation, but unemployment and financial instability”. Akyüz (2006) ...
... • “…the source of macroeconomic instability now is not instability in product markets but asset markets, and the main challenge for policy makers is not inflation, but unemployment and financial instability”. Akyüz (2006) ...
Abstract - NUS Business School
... The robustness of bubbles and crashes in markets for finitely-lived assets is perplexing. This paper reports the results of experimental asset markets in which participants trade two assets. In some markets, price bubbles form. In these markets, traders will pay even higher prices for the asset with ...
... The robustness of bubbles and crashes in markets for finitely-lived assets is perplexing. This paper reports the results of experimental asset markets in which participants trade two assets. In some markets, price bubbles form. In these markets, traders will pay even higher prices for the asset with ...
The Macroeconomics of Asset Shortages
... assets exacerbate the asset shortage. Nonrecessionary interest rate is much lower… Hope: where will these savings go in the medium run? Not many options at the aggregate level… this is one of the main reasons we are in this environment… ...
... assets exacerbate the asset shortage. Nonrecessionary interest rate is much lower… Hope: where will these savings go in the medium run? Not many options at the aggregate level… this is one of the main reasons we are in this environment… ...
How far we`ve come, how little we`ve changed
... We believe the result of the Fed’s action may be higher prices and higher interest rates in the near future. With the money supply and credit having doubled without a commensurate increase in output (gross domestic product) we believe prices will adjust upward due to more dollars chasing the same am ...
... We believe the result of the Fed’s action may be higher prices and higher interest rates in the near future. With the money supply and credit having doubled without a commensurate increase in output (gross domestic product) we believe prices will adjust upward due to more dollars chasing the same am ...
“Asset Prices, Financial Stability and Monetary Policy” by F.Allen
... Fundamental factors for rise: income growth, short term rates, credit growth, population growth (also country specific factors). Reinhart and Rogoff (2010) explore behavior of house prices during banking crises: On average, house prices fall by 36% and do not recover before 5 years (15 crises :1898- ...
... Fundamental factors for rise: income growth, short term rates, credit growth, population growth (also country specific factors). Reinhart and Rogoff (2010) explore behavior of house prices during banking crises: On average, house prices fall by 36% and do not recover before 5 years (15 crises :1898- ...
Economic bubble
An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is trade in an asset at a price or price range that strongly deviates from the corresponding asset's intrinsic value. It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future.Because it is often difficult to observe intrinsic values in real-life markets, bubbles are often conclusively identified only in retrospect, when a sudden drop in prices appears. Such a drop is known as a crash or a bubble burst. Both the boom and the burst phases of the bubble are examples of a positive feedback mechanism, in contrast to the negative feedback mechanism that determines the equilibrium price under normal market circumstances. Prices in an economic bubble can fluctuate erratically, and become impossible to predict from supply and demand alone.While some economists deny that bubbles occur, the cause of bubbles remains disputed by those who are convinced that asset prices often deviate strongly from intrinsic values. Many explanations have been suggested, and research has recently shown that bubbles may appear even without uncertainty, speculation, or bounded rationality. In such cases, the bubbles may be argued to be rational, where investors at every point fully compensated for the possibility that the bubble might collapse by higher returns. These approaches require that the timing of the bubble collapse can only be forecast probabilistically and the bubble process is often modelled using a Markov switching model. It has also been suggested that bubbles might ultimately be caused by processes of price coordination or emerging social norms.