Monetary policy and asset price bubbles: a laboratory experiment
Leaning-against the-wind (LAW) policies, whereby interest rates are raised in the face of a growing asset price bubble, are often advocated as a means of dampening such bubbles. On the other hand, there are theoretical arguments suggesting that such a policy could have the opposite effect (Gal í, 20...
| Autores: | , , |
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| Tipo de recurso: | artículo |
| Fecha de publicación: | 2021 |
| País: | España |
| Institución: | TecnoCampus |
| Repositorio: | Repositori Digital del TecnoCampus |
| OAI Identifier: | oai:repositori.tecnocampus.cat:20.500.12367/2578 |
| Acceso en línea: | http://hdl.handle.net/20.500.12367/2578 |
| Access Level: | acceso abierto |
| Palabra clave: | Monetary policy Price bubbles |
| Sumario: | Leaning-against the-wind (LAW) policies, whereby interest rates are raised in the face of a growing asset price bubble, are often advocated as a means of dampening such bubbles. On the other hand, there are theoretical arguments suggesting that such a policy could have the opposite effect (Gal í, 2014). We study the effect of monetary policy on asset price bubbles in a laboratory experiment with an overlapping generations structure. Participants in the role of the young generation allocate their endowment between two investments: a risky asset and a one-period riskless bond. The risky asset pays no dividend and thus the possibility of selling it to the next generation is its only source of value. [...] |
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