Monetary policy and stock market booms

Lawrence Christiano, Cosmin Ilut, Roberto Motto and Massimo Rostagno ()

No 2010-08, FRB Atlanta CQER Working Paper from Federal Reserve Bank of Atlanta

Abstract: Historical data and model simulations support the following conclusion: Inflation is low during stock market booms, so an interest rate rule that is too narrowly focused on inflation destabilizes asset markets and the broader economy. Adjustments to the interest rate rule can remove this source of welfare-reducing instability. For example, allowing an independent role for credit growth (beyond its role in constructing the inflation forecast) would reduce the volatility of output and asset prices.

Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (111)

Downloads: (external link)
http://www.frbatlanta.org/documents/cqer/publicationscq/cqerwp/cqer_wp10-08.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.frbatlanta.org/documents/cqer/publicationscq/cqerwp/cqer_wp10-08.pdf [301 Moved Permanently]--> https://www.frbatlanta.org/documents/cqer/publicationscq/cqerwp/cqer_wp10-08.pdf [301 Moved Permanently]--> https://www.atlantafed.org/documents/cqer/publicationscq/cqerwp/cqer_wp10-08.pdf)

Related works:
Working Paper: Monetary Policy and Stock Market Booms (2011)
Journal Article: Monetary policy and stock market booms (2010)
Working Paper: Monetary Policy and Stock Market Booms (2010)
Working Paper: Monetary Policy and Stock Market Booms (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedacq:2010-08

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in FRB Atlanta CQER Working Paper from Federal Reserve Bank of Atlanta Contact information at EDIRC.
Bibliographic data for series maintained by Rob Sarwark ().