Asset price momentum and monetary policy: time-varying parameter estimation of Taylor Rules

Asset-price Bubbles and Monetary Policy

for helpful discussions and comments, and to Pam Dillon and Paula Drew for assistance in preparing this document. The views expressed are those of the authors and should not be attributed to the Reserve Bank of Australia.

Time-Varying Monetary Policy Reaction Function: The Case of Iran

Monetary policy with asset price shocks and financial globalization

This papers studies how the stabilization role of monetary policy in response to asset price shocks changes with the globalization of financial markets. Changes in asset prices affect production through a credit channel and monetary policy can stabilize the macro-economy with counter-cyclical interventions. The paper shows that, as financial markets become internationally integrated, stabilizat...

Friedman and Taylor on Monetary Policy Rules: A Comparison

The names Milton Friedman and John Taylor are associated with different monetary policy rules; but, as shown in this paper, the difference between their perceptions of how the economy works is not great. The monetary policy rules advanced by Taylor and Friedman are compared by linking the rules to the two economists’ underlying views about nominal rigidity, the source of trade-offs, the sources...

MONETARY POLICY RULES , ASSET PRICES AND ADAPTIVE LEARNING ♦ Vicente

Following recent episodes of financial distress, the interaction between monetary policy and asset price fluctuations has gained renewed attention. Here, we assess the role of asset price misalignments in monetary policy in an adaptive learning context. Our model first extends Bullard and Mitra (2002), including an additional role for asset prices. From the point of view of the E-Stability crit...