Should monetary policy respond to asset price bubbles? Revisiting the debate

National Institute Economic Review

Volumn 206, Issue 1, 2008, Pages 25-34

  Wadhwani, Sushil ^a  

^a Wadhwani Asset Management LLP ^*

Author keywords

Asset price; Bubbles; Monetary policy

Indexed keywords

EID: 55049127723     PISSN: 00279501     EISSN: 17413036     Source Type: Journal    
DOI: 10.1177/0027950108099840     Document Type: Article

References (25)

1. Allen, F. and Gale, D. (2000). 'Bubbles and crises', The Economic Journal, 110, January, pp. 236-55.
2. Bean, C. (2003). 'Asset prices, financial imbalances and monetary policy: are inflation targets enough?', BIS Working Paper no. 140.
3. Bernanke, B. (2002). 'Asset-price "bubbles" and monetary policy', speech delivered at the New York Chapter of the National Association for Business Economics, New York, NY, 15 October.
4. Bernanke, B. and Gertler, M. (1999). 'Monetary policy and asset price volatility', in New Challenges for Monetary Policy: A Symposium Sponsored by the Federal Reserve Bank of Kansas City. Federal Reserve Bank of Kansas City, pp. 77-128.
5. 2001 ), 'Should central banks respond to movements in asset prices?', American Economic Review, May.
6. Borio, C. and Lowe, P. (2002). 'Asset prices, financial and monetary stability: exploring the nexus', BIS Working Papers, no 114.
7. Cecchetti, S.G. (2006). 'The brave new world of central banking: policy challenges posed by asset price booms and busts', National Institute Economic Review, 196, April.
8. Cecchetti, S.G., Genberg, H., Lipsky, J. and Wadhwani, S. (2000). Asset Prices and Central Bank Policy, Geneva Report on the World Economy 2, CEPR and ICMB.
9. Cecchetti, S.G., Genberg, H. and Wadhwani, S. (2002). 'Asset prices in a flexible inflation targeting framework', in Hunter, W.C., Kaufman, G.G. and Pomerleano, M. (eds), Asset Price Bubbles: The Implications for Monetary, Regulatory and International Policies, MIT Press, pp. 427-44.
10. Gertler, M. (1998) in Gertler, M., Goodfriend, M., Issing, O. and Spaventa, L., 'Asset prices and monetary policy: four views', Centre for Economic Policy Research (CEPR) and Bank for International Settlements (BIS) booklet, London, CEPR.
11. Goodhart, C. and Persaud, A. (2008). 'A party pooper's guide to financial stability', The Financial Times, June.
12. Greenspan, A. (1999). 'Testimony to the Committee on Banking and Financial Services', US House of Representatives, 22 July.
13. -(2007). The Age of Turbulence: Adventures in a New World, Allen Lane.
14. Gruen, D., Plumb, M. and Stone, A. (2005). 'How should monetary policy respond to asset price bubbles', International Journal of Central Banking, 3, 1, pp. 1-33.
15. Haugh, D. (2008). 'Monetary policy under uncertainty about the nature of asset price shocks', OECD, mimeo.
16. Heikensten, L. (2008). 'More to it than just "leaning against the wind"', The Financial Times, 5 June.
17. Issing, O. (1998). in Gertler, M., Goodfriend, M., Issing, O. and Spaventa, L., 'Asset prices and monetary policy: four views', Centre for Economic Policy Research (CEPR) and Bank for International Settlements (BIS) booklet, London, CEPR.
18. Kent, C. and Lowe, P. (1997). 'Asset-price bubbles and monetary policy', Research Discussion Paper, Reserve Bank of Australia, RDP 9709.
19. Kohn, D.R. (2006). 'Monetary policy and asset prices', speech delivered at 'Monetary Policy: A Journey from Theory to Practice', an ECB Colloquium held in honour of Otmar Issing, Frankfurt, Germany, 16 March.
20. Orphanides, A. (1998). 'Monetary policy evaluation with noisy information', Finance and Economics Discussion Paper 1998-50, Board of Governors of the Federal Reserve System.
21. Poole, W. (1970). 'Optimal choice of monetary policy instruments in a simple stochastic macro model', Quarterly Journal of Economics, 88, pp. 197-216.
22. Stein, J.C. (2004). 'Why are most funds open-end? Competition and the limits to arbitrage', unpublished manuscript, Harvard University, January.
23. Wadhwani, S.B. (1999 a). 'Currency puzzles', Speech delivered at the London School of Economics, 16 September, www.bankofengland.co.uk.
24. 1999 b), 'The US stock market and the global economic crisis', National Institute Economic Review, January, pp. 86-105. -(2007). 'The MPC: ten years old', The Times, May.
25. White, W.R. (2006). 'Procyclicality in the financial system: do we need a new macro financial stabilisation framework?', BIS Working Papers no.193.