Ensuring Financial Stability: Financial Structure and the Impact of Monetary Policy on Asset Prices

Stefan Gerlach () and Katrin Assenmacher

No 6773, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper studies the responses of residential property and equity prices, inflation and economic activity to monetary policy shocks in 17 countries, using data spanning 1986-2006. We estimate VARs for individual economies and panel VARs in which we distinguish between groups of countries on the basis of the characteristics of their financial systems. The results suggest that using monetary policy to offset asset price movements in order to guard against financial instability may have large effects on economic activity. Furthermore, while financial structure influences the impact of policy on asset prices, its importance appears limited.

Keywords: Asset prices; Monetary policy; Panel var (search for similar items in EconPapers)
JEL-codes: C23 E52 (search for similar items in EconPapers)
Date: 2008-04
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Citations: View citations in EconPapers (72)

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Related works:
Working Paper: Ensuring financial stability: Financial structure and the impact of monetary policy on asset prices (2008)
Working Paper: Ensuring financial stability: financial structure and the impact of monetary policy on asset prices (2008)
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