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Asset Price Regulators, Unite: You have the Macroeconomy to Win and the Microeconomic Losses are Small

Menzies, Gordon, Bird, Ronald, Dixon, Peter and Rimmer, Maureen T (2011) Asset Price Regulators, Unite: You have the Macroeconomy to Win and the Microeconomic Losses are Small. Economic Record, 87 (278). pp. 449-464. ISSN 0013-0249 (print) 1475-4932 (online)

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Abstract

The global financial crisis (GFC) has rekindled debate about the desirability of governmental interference in asset markets – either through the operation of policy levers, or through the chosen institutional setup. In this article, we quantify economic costs because of mispricing of real assets in the USAGE model of the USA. The microeconomic costs of misallocated capital are small. The model suggests that regulators (or central banks) who risk mispricing by influencing asset prices do so without incurring large economic costs.

Item Type: Article
Uncontrolled Keywords: capital misallocation, CGE modeling, financial crises, real assets, macroeconomic modeling
Subjects: FOR Classification > 1402 Applied Economics
Faculty/School/Research Centre/Department > College of Business
Faculty/School/Research Centre/Department > Centre of Policy Studies (CoPS)
Depositing User: Ms Julie Gardner
Date Deposited: 09 Apr 2014 06:59
Last Modified: 04 Oct 2015 23:54
URI: http://vuir.vu.edu.au/id/eprint/24677
DOI: https://doi.org/10.1111/j.1475-4932.2010.00702.x
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Citations in Scopus: 1 - View on Scopus

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