the working of the instruments is demonstrated and analyzed. It is shown that in theory both instruments are able to … suitable for the task of tackling asset price bubbles. -- Monetary Policy ; Banking Regulation ; Asset Prices ; Bubbles …

on prices, risk premia, asset price bubbles, and financial stability. Bubble risk premia arise from an interaction … adjusted risk and bubble risk premia increase. We propose a new framework for monetary policy with respect to bubbles. What …/pessimists). Accommodative policy can lead to a larger fraction of trading constrained agents that disagree, larger bubbles, and increased …

that the macroprudential policy should optimally respond to building asset price bubbles non-monotonically depending on the …

, abnormally high asset prices can be caused by financial bubbles. In this model, bubbles can emerge and deflate both in cycles or … rate. This can lead to new stable equilibria, but the emergence and bursting of bubbles cannot be prevented. …