Galí (2014) showed that a monetary policy rule that raises interest rates in response to bubbles can paradoxically lead … to larger bubbles. This comment shows that a central bank that wants to dampen bubbles can always do so by raising … argue Galí's model contains additional equilibria in which more aggressive rules dampen bubbles. We show that for these …

asset pricing in line with rational bubbles. We show that the response of the excessive stock price component to a monetary …

Qatar. Asset prices bubbles formed then burst creating large loses. They could have moderated the effect of, or avoided, the …

investment, but allow for harmful bubbles. Aggressive fiscal policy can prevent bubbles. …