Asset Price Regulators, Unite: You Have Macroeconomic Stability to Win and the Microeconomic Losses are Second-order
Download
Download
DownloadPreview
Available under license: Creative Commons Attribution
Export
Menzies, G, Bird, Ronald, 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).
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.
| Additional Information | CoPS/IMPACT Working Paper Number G-205 |
| Item type | Monograph (Working Paper) |
| URI | https://vuir.vu.edu.au/id/eprint/35949 |
| Official URL | https://www.copsmodels.com/elecpapr/g-205.htm |
| ISBN | 9781921654121 |
| Subjects | Historical > FOR Classification > 1402 Applied Economics Current > Division/Research > Centre of Policy Studies (CoPS) |
| Keywords | C50; G01; F41; financial crises; macroeconomic modeling; real assets |
| Download/View statistics | View download statistics for this item |
CORE (COnnecting REpositories)