Year: 2007
Type: article
Abstract: How asset prices should be taken into account in monetary policy is a controversial question in mainstream discussion. These mainstream positions can be differentiated into two broad perspectives: the proactive and the reactive views. The proactive view advocates pricking the asset price bubble, while the reactive view argues against monetary policy targeting asset prices. In this article the relation between asset prices and the Austrian business cycle theory is examined. Following this, a critique of both the proactive and reactive views is provided and implications for monetary policy are deduced. Key words: Austrian Economics, Business Cycles, Asset Prices, Central Banks and their Policies. JEL Classification: B53, E32, E58.
Source: REVISTA PROCESOS DE MERCADO
DOI: 10.52195/pm.v4i2.324
Author: Philipp Bagus
Institution: Universidad Rey Juan Carlos
Language: English
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W174734819