Asset Price Regulators Unite: You Have Macroeconomic Stability to Win and the Microeconomic Losses are Second-order
Ron Bird (),
Peter Dixon and
No 5, Working Paper Series from The Paul Woolley Centre for Capital Market Dysfunctionality, University of Technology, Sydney
The Global Financial Crisis (GFC) has rekindled debate about the desirability of governmental interference in asset markets – either through the operation of policy levers, or, through the chosen institutional setup. In this paper we quantify economic costs due to mispricing of real assets in the USAGE model of the United States. The microeconomic costs of misallocated capital are second-order small. The model suggests that regulators (or central banks) who restrain the volatility of asset prices do so without incurring large economic costs.
Keywords: financial crises; macroeconomic modeling; real assets (search for similar items in EconPapers)
JEL-codes: C50 G01 F41 (search for similar items in EconPapers)
Pages: 21 pages
New Economics Papers: this item is included in nep-cba
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Working Paper: Asset Price Regulators, Unite: you have Macroeconomic Stability to Win and the Microeconomic Losses are Second-order (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:uts:pwcwps:5
Access Statistics for this paper
More papers in Working Paper Series from The Paul Woolley Centre for Capital Market Dysfunctionality, University of Technology, Sydney PO Box 123, Broadway, NSW 2007, Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Duncan Ford ().