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Keywords:asset bubbles OR Asset bubbles 

Should Monetary Policy Prevent Bubbles

Remarks by Charles L. Evans, President and Chief Executive Officer, Federal Reserve Bank of Chicago Conference Banque de France - Federal Reserve Bank of Chicago "Asset Price Bubbles and Monetary Policy" Paris, France
Speech , Paper 35

Journal Article
What Happens When Bubbles Pop?

At the Richmond Fed highlighted research: "Asset Bubbles and Global Imbalances." Toan Phan and Daisuke Ikeda. American Economic Journal: Macroeconomics, forthcoming.
Econ Focus , Issue 4Q , Pages 08-08

Working Paper
On Interest Rate Policy and Asset Bubbles

In a provocative paper, Gal (2014) showed that a policymaker who raises interest rates to rein in a potential bubble will only make a bubble bigger if one exists. This poses a challenge to advocates of lean-against-the-wind policies that call for raising interest rates to mitigate potential bubbles. In this paper, we argue there are situations in which the lean-against-the wind view is justified. First, we argue Gal?s framework abstracts from the possibility that a policymaker who raises rates will crowd out resources that would have otherwise been spent on the bubble. Once we modify Gal?s ...
Working Paper Series , Paper WP-2017-16

Journal Article
Asset Bubbles: Detecting and Measuring Them Are Not Easy Tasks

Market bubbles are linked to many historic financial crises, but asset price run-ups can reflect both fundamental value changes and psychological contagion. Using historic values of commonly held assets (stocks and real estate), a novel ?exuberance index? offers a way to compare bubbles.
The Regional Economist , Issue July

Journal Article
Bridging Between Policymakers’ and Economists’ Views on Bubbles

Senior economist Gadi Barlevy examines the gap between policymakers and researchers when it comes to asset bubbles. He describes policymakers? key questions about asset bubbles and asks how economic models might be used to shed light on them.
Economic Perspectives , Issue 4 , Pages 1-21

Asset Bubbles and Global Imbalances

What caused the housing boom and bust of the early 2000s? Capital inflows from emerging markets to developed economies can contribute to the formation of bubbles in asset prices. Those bubbles encourage the accumulation of debt, and the deleveraging of that debt exacerbates the decline in economic activity when the bubble bursts.
Richmond Fed Economic Brief , Volume 20-01 , Pages 4

The Roots of ‘Bubbly’ Recessions

A downturn following the collapse of an asset bubble ? an episode of speculative booms in asset prices ? can be severe and sustained, with output and employment often lower than in the prebubble economy. This Economic Brief considers some possible theoretical explanations. It argues, based on insights from a simple economic model, that the interaction among financial frictions, wage rigidity, and the constraints of monetary policy near the zero lower bound is a key source of inefficiency in large bubbles. One potential remedy is to regulate speculative investment on bubbly assets so that ...
Richmond Fed Economic Brief , Issue April



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