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Asset Price Regulators, Unite: You Have Macroeconomic Stability to Win and the Microeconomic Losses are Second-order

Menzies, G, Bird, R, Dixon, Peter and Rimmer, Maureen T (2010) Asset Price Regulators, Unite: You Have Macroeconomic Stability to Win and the Microeconomic Losses are Second-order. Working Paper. Centre of Policy Studies (COPS).

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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 paper we quantify economic costs due to mispricing of real assets in the USAGE model of the United States. The microeconomic costs of misallocated capital are second-order small. The model suggests that regulators (or central banks) who restrain the volatility of asset prices do so without incurring large economic costs.

Item Type: Monograph (Working Paper)
ISBN: 9781921654121
Additional Information:

CoPS/IMPACT Working Paper Number G-205

Uncontrolled Keywords: C50; G01; F41; financial crises; macroeconomic modeling; real assets
Subjects: FOR Classification > 1402 Applied Economics
Faculty/School/Research Centre/Department > Centre of Policy Studies (CoPS)
Depositing User: Symplectic Elements
Date Deposited: 12 Apr 2018 02:01
Last Modified: 15 Jul 2019 03:16
URI: http://vuir.vu.edu.au/id/eprint/35949
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