Liquidity, Inflation and Asset Prices in a Time-Varying Framework for the Euro Area

Christiane Baumeister, Eveline Durinck and Gert Peersman ()

Discussion Papers from University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM)

Abstract: In this paper, we investigate how the dynamic effects of excess liquidity shocks on economic activity, asset prices and inflation differ over time. We show that the impact varies considerably over time, depends on the source of increased liquidity (M1, M3-M1 or credit) and the underlying state of the economy (asset price boom-bust, business cycle, inflation cycle, credit cycle and monetary policy stance).

Keywords: Liquidity; asset prices; inflation; time-varying coefficients. (search for similar items in EconPapers)
Date: 2008-06
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Related works:
Working Paper: Liquidity, inflation and asset prices in a time-varying framework for the euro area (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:not:notcfc:08/06

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