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4 edition of Monetary policy, asset-price bubbles, and the zero lower bound found in the catalog.

Monetary policy, asset-price bubbles, and the zero lower bound

T. J. C. Robinson

Monetary policy, asset-price bubbles, and the zero lower bound

by T. J. C. Robinson

  • 291 Want to read
  • 20 Currently reading

Published by National Bureau of Economic Research in Cambridge, MA .
Written in English

    Subjects:
  • Monetary policy -- Mathematical models.,
  • Securities -- Prices -- Mathematical models.,
  • Deflation (Finance) -- Mathematical models.,
  • Financial crises -- Mathematical models.

  • Edition Notes

    StatementTim Robinson, Andrew Stone.
    SeriesNBER working paper series ;, working paper 11105, Working paper series (National Bureau of Economic Research : Online) ;, working paper no. 11105.
    ContributionsStone, Andrew H. W., 1958-, National Bureau of Economic Research.
    Classifications
    LC ClassificationsHB1
    The Physical Object
    FormatElectronic resource
    ID Numbers
    Open LibraryOL3477093M
    LC Control Number2005616707

    B) A bubble may only exist in some asset-prices and monetary policy will affect all asset prices. C) Using monetary policy to prick an asset-price bubble may have adverse effect on the aggregate economy. D) Even though credit-drive bubbles are easier . Monetary Policy, Asset-price Bubbles, and the Zero Lower Bound 45 1. Note that our focus in this chapter is on the e ffect which these possibilities (i.e., the pres-ence of the ZLB) might have on the interest rate recommendations of policymakers, over and above whatever direct impact the presence of the bubble itself might have on these recom-.

    A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a state or formal monetary union, and oversees their commercial banking contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base in a financial central banks also have supervisory and regulatory powers to ensure. 12 The Eurozone and monetary union. History of the Eurozone; Modelling the Eurozone. The real exchange rate channel; Eurozone governance, sovereign risk and banking; 13 Monetary policy. The monetary transmission mechanism; Monetary response to bubbles; The zero bound; Alternative monetary policy;

    Monetary Policy and Rational Asset Price Bubbles by Jordi Galí. Published in volume , issue 3, pages of American Economic Review, March , Abstract: I examine the impact of alternative monetary policy rules on a rational asset price bubble, through the lens of an overlapping generation.   Monetary policy after bubbles burst: the zero lower bound, the liquidity trap and the credit deadlock, Laidler, D. (). Canadian Public Policy/Analyse de Politiques,


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Monetary policy, asset-price bubbles, and the zero lower bound by T. J. C. Robinson Download PDF EPUB FB2

Monetary Policy, Asset-Price Bubbles and the Zero Lower Bound Tim Robinson, Andrew Stone. NBER Working Paper No. Issued in February NBER Program(s):Monetary Economics We use a simple model of a closed economy to study the recommendations of monetary policy-makers, attempting to respond optimally to an asset-price bubble whose stochastic properties they by: Bernanke and Gertler’s influential article “Asset Price Bubbles and Monetary Policy” made the case that monetary policy should respond to asset prices only to the extent that they have.

Downloadable. We use a simple model of a closed economy to study the recommendations of monetary policy-makers, attempting to respond optimally to an asset-price bubble whose stochastic properties they understand.

We focus on the impact which the zero lower bound (ZLB) on nominal interest rates has on the recommendations of such policy-makers. Jacopo Bonchi, "Asset Price And the zero lower bound book and Monetary Policy: Revisiting the Nexus at the Zero Lower Bound," Working Papers 9/20, Sapienza University of Rome, : RePEc:saq:wpaper:9/ CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): Monetary policy use a simple, two equation model of a closed economy to study the interest rate recommendations of a policy-maker, attempting to respond optimally to an asset-price bubble whose stochastic properties they understand.

Specifically, we focus on the impact which the zero lower bound on nominal interest rates has on. RDP Monetary Policy, Asset-Price Bubbles and the Zero Lower Bound 2. Methodology Tim Robinson and Andrew Stone The reason for these choices is that much of the discussion about how monetary policy should react to asset-price bubbles focuses on the extreme informational difficulties that policy-makers face in determining the.

Bubbles Whose Growth is Affected by Policy. In Sections and we considered only purely exogenous asset-price bubbles.

A natural extension is to assume that, by setting tighter policy this year, policy-makers can reduce the extent of the bubble's growth next year, if it survives. Further, we find that the zero-lower bound constraint leads to different dynamics but does not change our main finding that unconventional monetary policy stabilizes the economy much more for the capital quality shock compared to the asset price bubble.

The final hurdle before invoking a Bubble Policy involves assessing whether monetary policy is the best way to deflate the asset price bubble.

Ideally, for the Bubble Policy, a moderate adjustment of interest rates could constrain the bubble and greatly reduce the risk of severe future macroeconomic dislocations. R obinson, T im, and A ndrew S tone (), “Monetary Policy, Asset Price-Bubble and the Zero Lower Bound”, NBER Working Paper No.

Cambridge, MA. S vensson L ars (), “Inflation Forecast Targeting: Implementing and Monitoring Inflation Targets”, European Economic Review, 41(6), pp.

Monetary Policy, Asset-Price Bubbles and the Zero Lower Bound. By Tim Robinson and Andrew Stone. Get PDF ( KB) Abstract. We use a simple model of a closed economy to study the recommendations of monetary policy-makers, attempting to respond optimally to an asset-price bubble whose stochastic properties they understand.

Alternative monetary policy. To combat the zero bound, the main policy used was quantitative easing. This involves using high powered money to purchase financial assets.

In the UK the BoE bought government bonds from non-financial organisations, in the US it was mortgage-backed bonds bought from financial institutions. price bubbles can affect significantly monetary policy by relaxing the zero lower bound constraint in a low interest rates environment.

The macroeconomic literature has widely studied the relationship between monetary policy and asset price bubbles starting from the. Get this from a library. Monetary policy, asset-price bubbles and the zero lower bound.

[Tim Robinson; Andrew H W Stone; National Bureau of Economic Research.] -- "We use a simple model of a closed economy to study the recommendations of monetary policy-makers, attempting to respond optimally to an asset-price bubble whose stochastic properties they.

European Central Bank (), "Asset Price Bubbles and Monetary Policy" ( MB PDF), Monthly Bulletin (April), p. Return to text.

The article's label for this strategy--leaning against the wind--has been used for many years to describe the standard behavior of central banks. We found some significant differences when looking at the results during and in the aftermath of the crisis: with the shadow rate, the impact of monetary policy shocks on asset prices becomes negative.

There is also a much lower positive impact of monetary policy shocks on bubbles. In the presence of a credit-driven asset price bubble, the appropriate policy is. macroprudential regulation. is propagated by low interest rates from overly easy monetary policy.

The zero lower bound on interest rates can be a serious problem. Question: QUESTION 11 One Of The Limiting Factors For Using Monetary Policy Is: A- The Real Interest Rate Cannot Fall Below Zero.

B- Central Banks Are Limited In Their Ability To Make Loans. C- There Is A Lower Nominal-interest-rate Bound Of Zero. D- The Central Banks Are Limited In Their Ability To Print Money. This book examines asset price bubbles to further our understanding of the causes and implications of financial instability, focusing on the potential of central banks and regulatory agencies to prevent it.

The book grew out of a conference jointly sponsored by the Federal Reserve Bank of Chicago and the World Bank Group in April Reviews: 1. Monetary Policy, Asset-Price Bubbles and the Zero Lower. Kent, Christopher, and Philip Lowe.

“Asset-Price Bubbles and Monetary Policy.” Reserve Bank of Australia Research Discussion Paper Robinson, Tim, and Andrew Stone. “Monetary Policy, Asset Price Bubbles and the Zero Lower Bound.” NBER Working Paper No. Rudebusch, Glenn D. “What are the Lags in Monetary.Keywords: monetary policy, asset price bust, zero lower bound, cleaning-up, pre-emptive tightening 1.

Introduction The economic costs of a financial crisis can be tremendous, as proven by the crisis that erupted in the late s, after the fall of Lehman Brothers. Until very recently, monetary policy has not been regarded as being able or having.Economist Paul Krugman has argued that Japan's lost decade is an example of a liquidity trap (a situation in which monetary policy is unable to lower nominal interest rates because it is already close to zero).

He explained how truly massive the asset bubble was in Japan bywith a tripling of land and stock market prices during the.