Artikel
Monetary Policy and Asset Prices: When Cleaning Up Hits the Zero Lower Bound
Recently, convincing evidence has been presented that the recession in the wake of the recent financial crisis resulted primarily from an overly levered housing sector that was forced to deleverage and cut consumption spending when faced with collapsing housing prices. Following this interpretation it is argued that, as opposed to the consensus view on monetary policy in the vicinity of the ZLB, optimal monetary policy may involve an interest rate increase if the ZLB threatens to become a binding constraint in the aftermath of an asset price bust. This result delivers arguments to advocate a in the previous literature less favored pre-emptive tightening policy in an asset price boom.
- Language
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Englisch
- Bibliographic citation
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Journal: Swiss Journal of Economics and Statistics ; ISSN: 2235-6282 ; Volume: 149 ; Year: 2013 ; Issue: 3 ; Pages: 291-312 ; Heidelberg: Springer
- Classification
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Wirtschaft
Monetary Policy
Central Banks and Their Policies
Financial Markets and the Macroeconomy
- Subject
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monetary policy
asset price bust
zero lower bound
cleaning-up
pre-emptive tightening
- Event
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Geistige Schöpfung
- (who)
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Berger, Wolfram
Kissmer, Friedrich
- Event
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Veröffentlichung
- (who)
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Springer
- (where)
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Heidelberg
- (when)
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2013
- DOI
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doi:10.1007/BF03399393
- Handle
- Last update
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10.03.2025, 11:42 AM CET
Data provider
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Object type
- Artikel
Associated
- Berger, Wolfram
- Kissmer, Friedrich
- Springer
Time of origin
- 2013
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