This paper articulates three insights regarding asset prices and monetary policy: (1) Asset price appreciation due to monetary expansion, despite its “paper” wealth nature, tends to make current consumers as a whole wealthier; (2) the wealth effect of monetary policy (on consumption) is...

The paper considers a modelin which limited liability causes an asset substitution problem for banks. The problem can at times become so severe that the current regulatory framework – based on a combination of effectively full deposit insurance, minimum capital requirements and prudential...

The general view of the media, bankers, business and politicians, not noticeably contradicted by academics, is that one of the main functions, or the main function, of the central bank is to analyse the progress of the economy, and then to steer it with skilful judgement towards health and...

El corto es un instrumento de política monetaria que utiliza el Banco de México para abatir la inflación. El corto ha sido un instrumento muy útil para Banco de México en la conducción de la política monetaria, porque ha permitido que los choques a los mercados se distribuyan y se...

This book focuses on general theory of price. Price, wage, interest rate, GNP and exchange rate, five factors, are very important not only in economics and economical activity, but also in social and political life. Those five factors are concrete, but also abstract. They belong to different...

Putting the theory of price system on the relationship among price, wage, labor time, interest rate and GNP (or GDP), four main variables in economics, Four-Rate Formula and Exchange Rate Formula are created (Xiaozhong Zhai 2003). Two formulas applying to analyses of economy and calculation can...

Inflation targeting is a regime based to a great extent on communication and, more specifically, on using and communicating assessments of future inflation. The central banking literature, however, devotes surprisingly little attention to some important issues connected with such assessments....

This paper investigates the causes of business cycle fluctuations that Japan experienced over the period 1980 to 2000. To this end, I build a dynamic general equilibrium model with endogenous borrowing constraints where business cycle fluctuations are the result of TFP fluctuations and...

Despite his emphasis on the speculative character of investment decisions, Minsky paid little attention to asset price speculation per se, ignoring asset price bubbles and their macroeconomic effects. That is perhaps because his views were formed during the era of financial regulation, when...

A LOOK AT EXCHANGE RATE AND MONETARY POLICY IN MALAWI* Prepared by K Simwaka Research & Statistics Department Reserve Bank of Malawi Abstract The paper assesses whether the exchange rate is affected by monetary policy and whether these effects are permanent or transitory. The paper takes the...