European Parliament Library

Macroeconomic Patterns and Monetary Policy in the Run-up to Asset Price Busts, Alasdair Scott, Pau Rabanal, Prakash Kannan

Abstract
We find that inflation, output and the stance of monetary policy do not typically display unusual behavior ahead of asset price busts. By contrast, credit, shares of investment in GDP, current account deficits, and asset prices typically rise, providing useful, if not perfect, leading indicators of asset price busts. These patterns could also be observed in the build-up to the current crisis. Monetary policy was not the main, systematic cause of the current crisis. But, with inflation typically under control, central banks effectively accommodated these growing imbalances, raising the risk of damaging busts
Language
eng
Literary Form
non fiction
Note
"November 2009"
Physical Description
39 p., ill.
Specific Material Designation
remote
Form Of Item
online
Isbn
9781462317417

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