Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 3 of 3
Full-Text Articles in Business
House Bubbles, Global Imbalances And Monetary Policy In The Us, Anastasios Evgenidis, A. (Tassos) G. Malliaris
House Bubbles, Global Imbalances And Monetary Policy In The Us, Anastasios Evgenidis, A. (Tassos) G. Malliaris
School of Business: Faculty Publications and Other Works
This paper examines the factors driving housing price exuberance in the United States, specifically the influence of expansionary monetary policies and the global saving glut. We employ medium scale Bayesian VAR and time-varying VAR models to estimate the effects of monetary policy and global saving glut shocks on US housing bubbles. We find that, prior to the Global Financial Crisis, the impact of the saving glut shock is more enduring, powerful, and rapid in generating housing bubbles compared to monetary policy shocks. However, the recent housing boom that commenced in 2019 demonstrates a different pattern. Our results suggest that both …
The Evolving Nature Of Asset Price Bubbles, Financial Instability And Monetary Policy, A. (Tassos) G. Malliaris
The Evolving Nature Of Asset Price Bubbles, Financial Instability And Monetary Policy, A. (Tassos) G. Malliaris
School of Business: Faculty Publications and Other Works
This paper links the bursting of the housing asset price bubble around 2007 in the U.S. to the instability that arose in financial markets with the bankruptcy of Lehman Brothers in September 2008, and both of these to the Great Recession and the unconventional monetary policy that followed. Similar narratives about the Stock Market Crash of 1929, the Crash of 1987 and the Internet Bubble of 2000 are briefly presented to show their evolving financial nature, describe the financial instabilities produced by them and their costs and, finally examine the responses initiated, primarily, by monetary policy. This analytical synopsis of …
Asset Price Bubbles And Central Bank Policies: The Crash Of The "Jackson Hole Consensus", A. G. Malliaris
Asset Price Bubbles And Central Bank Policies: The Crash Of The "Jackson Hole Consensus", A. G. Malliaris
School of Business: Faculty Publications and Other Works
This chapter examines whether or not monetary policy should respond to asset price bubbles. More specifically, it asks how central banks respond while an asset bubble is growing and how they respond after the bubble bursts. It begins with a general overview of asset bubbles that supports the existence of the real and financial sectors of an economy before discussing how the bursting of asset price bubbles may cause financial instability that often adversely affects the real sector of an economy. It then describes the normative vs. positive responses of a central bank to asset price bubbles, along with the …