scholarly journals Expectations, Asset Prices, and Monetary Policy: The Role of Learning

2006 ◽  
Author(s):  
Simon Gilchrist ◽  
Masashi Saito
Keyword(s):  
Monetary Policy ◽  
Asset Prices

scholarly journals Asset prices regime-switching and the role of inflation targeting monetary policy

2017 ◽  
Vol 32 ◽  
pp. 97-112 ◽  
Author(s):  
Ioannis Chatziantoniou ◽  
George Filis ◽  
Christos Floros
Keyword(s):  
Monetary Policy ◽  
Regime Switching ◽  
Asset Prices ◽  
Inflation Targeting

scholarly journals The Role of Monetary Policy in Transmission of Asset Prices into Goods Prices

2020 ◽  
Vol 4 (1) ◽  
pp. 143-167
Author(s):  
Sidra Mariyam ◽  
Wasim Shahid Malik
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Stock Prices ◽  
Asset Prices ◽  
Inflation Rate ◽  
House Prices ◽  
Asset Price ◽  
Price Inflation

Monetary policy in the contemporary world reacts, through short term interest rate, to deviations of inflation rate and output from their respective targets, while asset prices are responded to the extent they contribute to these deviations. This practice significantly affects transmission of asset prices into goods prices, which has serious implications for income distribution. This paper sets the objectives of estimating transmission of asset prices into goods prices and the role of monetary policy in influencing this transmission. In this regard, the paper hypothesizes that inflation rate positively responds to asset prices and this response weakens if interest rate leans against the winds of inflation, output and asset prices. To test these hypotheses, we have estimated different specifications of vector autoregressive (VAR) model and impulse response functions have been found after identifying structural shocks. Data of Pakistan’s economy on inflation rate, large scale manufacturing index, interest rate and asset price index – comprising house prices, stock prices and exchange rate – are used for the time period 2000m01 to 2019m06. We find evidence in support of both hypotheses; asset price inflation positively transmits into goods price inflation and this transmission intensifies if interest rate does not respond to other variables in the model. Moreover, transmission of asset prices into inflation rate, as compared to output, is influenced more by monetary policy. Finally, we find that the transmission of exchange rate and house prices to inflation rate are very much affected by monetary policy while in case of stock prices the influence of policy is moderate.

Practical Issues in United Kingdom Monetary Policy, 2000–2005

2007 ◽  
Author(s):  
STEPHEN NICKELL
Keyword(s):  
Monetary Policy ◽  
United Kingdom ◽  
Asset Prices ◽  
Household Debt ◽  
Rapid Rise ◽  
Inflation Target ◽  
Monetary Policy Committee ◽  
Housing Boom ◽  
Bank Of England

This chapter discusses some of the topics the Bank of England Monetary Policy Committee has spent a lot of time on. It first examines the rapid rise in household debt and its implications for monetary policy. The next section looks at the role of asset prices in monetary policy, with particular reference to the recent UK housing boom. Finally, the chapter discusses the implications of the switch in the inflation target at the end of 2003.

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