Should ASEAN-5 Monetary Policymakers Act Pre-emptively Against Stock Market Bubbles?
Mala Raghavan () and
Mardi Dungey ()
No 2014-04, Working Papers from University of Tasmania, Tasmanian School of Business and Economics
Stock market rises and asset price inflation in ASEAN economies have raised the question of whether monetary authorities of these economies should act pre-emptively against these rising trends to prevent impending financial crises. Using a structural VECM which incorporate mixed data characteristics we examine the effects and interactions between monetary policy and stock market shocks for Singapore, Malaysia, Thailand, Indonesia and the Philippines. The results suggest that monetary policy focused on the stock market detracts from price stability objectives, in particular because containing a stock market bubble may inadvertently depress output and inflation.
Keywords: SVECM; monetary policy; stock market; ASEAN (search for similar items in EconPapers)
JEL-codes: C32 C53 E44 E52 F33 (search for similar items in EconPapers)
Date: 2014, Revised 2014
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Published by the University of Tasmania, Discussion paper 2014-4
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Journal Article: Should ASEAN-5 monetary policy-makers act pre-emptively against stock market bubbles? (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:tas:wpaper:17832
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