Arbeitspapier
Monetary policy and stock market boom-bust cycles
We explore the dynamic effects of news about a future technology improvement which turns out ex post to be overoptimistic. We find that it is difficult to generate a boom-bust cycle (a period in which stock prices, consumption, investment and employment all rise and then crash) in response to such a news shock, in a standard real business cycle model. However, a monetized version of the model which stresses sticky wages and a Taylorrule based monetary policy naturally generates a welfare-reducing boom-bust cycle in response to a news shock. We explore the possibility that integrating credit growth into monetary policy may result in improved performance. We discuss the robustness of our analysis to alternative specifications of the labor market, in which wage-setting frictions do not distort on going firm/worker relations.
- Sprache
-
Englisch
- Erschienen in
-
Series: ECB Working Paper ; No. 955
- Klassifikation
-
Wirtschaft
Bayesian Analysis: General
Model Construction and Estimation
General Aggregative Models: Neoclassical
Business Fluctuations; Cycles
- Thema
-
Asset price boom-busts
DSGE Models
monetary policy
Geldpolitik
Börsenkurs
Finanzkrise
Real-Business-Cycle-Theorie
Taylor-Regel
Kreditmarkt
Arbeitsmarkt
Dynamisches Gleichgewicht
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Christiano, Lawrence
Ilut, Cosmin
Motto, Roberto
Rostagno, Massimo
- Ereignis
-
Veröffentlichung
- (wer)
-
European Central Bank (ECB)
- (wo)
-
Frankfurt a. M.
- (wann)
-
2008
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Christiano, Lawrence
- Ilut, Cosmin
- Motto, Roberto
- Rostagno, Massimo
- European Central Bank (ECB)
Entstanden
- 2008
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