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ResearchPaper
2010
Asset prices, inflation and monetary control : re-inventing money as a policy tool
Asset prices, inflation and monetary control : re-inventing money as a policy tool
Abstract (English)
Low inflation on goods markets provides no reliable precondition for asset-market stability; it might even promote the emergence of bubbles because interest rates and risk premia appear to be low. A further factor driving asset demand is easy availability of credit, which in turn roots in the banking system operating in a regime of endogenous central-bank money. A comparison of Bundesbank and ECB policies suggests that credit growth can be controlled more efficiently if rising interest rates are accompanied by some liquidity squeeze that supports the spillover of a monetary restriction to capital markets. The announcement effect of a central bank Charter including the goal of financial-market stability helps to deter private agents from excessive asset trading.
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Publication series
Hohenheimer Diskussionsbeiträge; 323
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Faculty
Faculty of Business, Economics and Social Sciences
Institute
Institut für Volkswirtschaftslehre (bis 2010)
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Language
English
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Classification (DDC)
330 Economics
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BibTeX
@techreport{Spahn2010,
url = {https://hohpublica.uni-hohenheim.de/handle/123456789/5377},
author = {Spahn, Peter},
title = {Asset prices, inflation and monetary control : re-inventing money as a policy tool},
year = {2010},
school = {Universität Hohenheim},
series = {Hohenheimer Diskussionsbeiträge},
}