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What should Monetary Policy do in the Face of Soaring Asset Prices and Rampant Credit Growth?

Epaulard, Anne (2018), What should Monetary Policy do in the Face of Soaring Asset Prices and Rampant Credit Growth?, Revue de l'OFCE, 3, 157, p. 283-298. 10.3917/reof.157.0283

Type
Article accepté pour publication ou publié
Date
2018
Journal name
Revue de l'OFCE
Volume
3
Number
157
Publisher
Presses de Sciences Po
Pages
283-298
Publication identifier
Metadata
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Author(s)
Epaulard, Anne
Laboratoire d'Economie de Dauphine [LEDa]
Abstract (EN)
In the aftermath of the financial crisis macroeconomists once again took an interest in the options offered by monetary policy to deal with asset price bubbles. Empirical studies seem to show that the soaring debt of agents is more dangerous than the soaring prices of financial assets. Macroprudential tools now appear to be able to limit the amplitude of cycles of indebtedness. The debate is henceforth focusing on the last resort role left to monetary policy in cases where the implementation of macroprudential tools will not be sufficient.
Subjects / Keywords
Monetary policy; Asset prices; Financial cycle; Macroprudential policy
JEL
G12 - Asset Pricing; Trading Volume; Bond Interest Rates
E52 - Monetary Policy