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

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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)

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.

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Item type Article
URI https://vuir.vu.edu.au/id/eprint/24677
DOI https://doi.org/10.1111/j.1475-4932.2010.00702.x
Official URL http://onlinelibrary.wiley.com/doi/10.1111/j.1475-...
Subjects Historical > FOR Classification > 1402 Applied Economics
Historical > Faculty/School/Research Centre/Department > College of Business
Current > Division/Research > Centre of Policy Studies (CoPS)
Keywords capital misallocation, CGE modeling, financial crises, real assets, macroeconomic modeling
Citations in Scopus 1 - View on Scopus
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