Low Interest Rates and High Asset Prices PDF Download
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Author: Robert J. Shiller
Publisher:
ISBN:
Category : Assets (Accounting)
Languages : en
Pages : 44
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Book Description
There has been a widespread perception in the past few years that long-term asset prices are generally high because monetary authorities have effectively kept long-term interest rates, which the market uses to discount cash flows, low. This perception is not accurate. Long-term interest rates have not been especially low. What has changed to produce high asset prices appears instead to be changes in popular economic models that people actually rely on when valuing assets. The public has mostly forgotten the concept of "real interest rate." Money illusion appears to be an important factor to consider.
Author: Robert J. Shiller
Publisher:
ISBN:
Category : Assets (Accounting)
Languages : en
Pages : 44
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Book Description
There has been a widespread perception in the past few years that long-term asset prices are generally high because monetary authorities have effectively kept long-term interest rates, which the market uses to discount cash flows, low. This perception is not accurate. Long-term interest rates have not been especially low. What has changed to produce high asset prices appears instead to be changes in popular economic models that people actually rely on when valuing assets. The public has mostly forgotten the concept of "real interest rate." Money illusion appears to be an important factor to consider.
Author: Ralph Turvey
Publisher: Routledge
ISBN: 1000579891
Category : Business & Economics
Languages : en
Pages : 69
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Book Description
First published in 1960, Interest Rates and Asset Prices presents an analysis of the determination of interest rates and asset prices with the help of few simple assumptions. The theory can be regarded either as an alternative to the liquidity preference theory or as an extension of it. Like that theory, it is aggregative and simple, but it is applicable not only to interest rates on government securities but also to yields on real assets. Furthermore, it can be formulated in terms of actually measurable variables, so that it is directly applicable to particular situations. This is demonstrated by a statistical example relating to the average yield on U.S. Government securities in the post- war period. In addition to the main analysis the author discusses the role of financial intermediaries and the structure of interest rates, and there is also a re-examination of the determinants of the transactions demand for money. This is book is an essential read for students of economics.
Author: John Y. Campbell
Publisher: University of Chicago Press
ISBN: 0226092127
Category : Business & Economics
Languages : en
Pages : 444
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Book Description
Economic growth, low inflation, and financial stability are among the most important goals of policy makers, and central banks such as the Federal Reserve are key institutions for achieving these goals. In Asset Prices and Monetary Policy, leading scholars and practitioners probe the interaction of central banks, asset markets, and the general economy to forge a new understanding of the challenges facing policy makers as they manage an increasingly complex economic system. The contributors examine how central bankers determine their policy prescriptions with reference to the fluctuating housing market, the balance of debt and credit, changing beliefs of investors, the level of commodity prices, and other factors. At a time when the public has never been more involved in stocks, retirement funds, and real estate investment, this insightful book will be useful to all those concerned with the current state of the economy.
Author: Mr.Giovanni Dell'Ariccia
Publisher: International Monetary Fund
ISBN: 1484381130
Category : Business & Economics
Languages : en
Pages : 41
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Book Description
We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data on the internal ratings of U.S. banks on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms of business lending. We find that ex-ante risk taking by banks (as measured by the risk rating of the bank’s loan portfolio) is negatively associated with increases in short-term policy interest rates. This relationship is less pronounced for banks with relatively low capital or during periods when banks’ capital erodes, such as episodes of financial and economic distress. These results contribute to the ongoing debate on the role of monetary policy in financial stability and suggest that monetary policy has a bearing on the riskiness of banks and financial stability more generally.
Author: Jane Dokko
Publisher:
ISBN:
Category : Monetary policy
Languages : en
Pages : 76
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Book Description
Author: Andreas Jobst
Publisher: International Monetary Fund
ISBN: 1475524471
Category : Business & Economics
Languages : en
Pages : 48
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Book Description
More than two years ago the European Central Bank (ECB) adopted a negative interest rate policy (NIRP) to achieve its price stability objective. Negative interest rates have so far supported easier financial conditions and contributed to a modest expansion in credit, demonstrating that the zero lower bound is less binding than previously thought. However, interest rate cuts also weigh on bank profitability. Substantial rate cuts may at some point outweigh the benefits from higher asset values and stronger aggregate demand. Further monetary accommodation may need to rely more on credit easing and an expansion of the ECB’s balance sheet rather than substantial additional reductions in the policy rate.
Author: Cullen Roche
Publisher: Macmillan
ISBN: 1137279311
Category : Business & Economics
Languages : en
Pages : 252
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Book Description
An insightful and original look at why understanding macroeconomics is essential for all investors
Author: Stephen Giovanni Cecchetti
Publisher: Centre for Economic Policy Research
ISBN: 9781898128533
Category : Business & Economics
Languages : en
Pages : 164
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Book Description
Concludes the role of asset prices in monetary policy is one of the most important, and difficult, questions confronting central banks.
Author: Marlon Azinovic
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Author: William Curt Hunter
Publisher: MIT Press
ISBN: 9780262582537
Category : Business & Economics
Languages : en
Pages : 650
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Book Description
A study of asset price bubbles and the implications for preventing financial instability.
