Asset prices and monetary policy

Author: Cheng Jiajun
Publisher:
Publish Date: 2004-12-01
Features: The relationship between capital prices and monetary policy has been a long-standing frontier theoretical issue for central banks and monetary economists worldwide. This book conducts an in-depth exploration from both theoretical and policy perspectives, examining the relationship between capital prices, particularly stock prices, and inflation, as well as the connections between asset prices and money supply/demand, asset prices and monetary policy intermediate targets. It analyzes the relationship between asset prices and investment, wealth effects, and the transmission mechanism of monetary policy. Additionally, it examines the optimal monetary policy choices for central banks in the face of asset price fluctuations and conducts empirical analyses of Japan and the United States. The book employs mathematical research methods, following a research approach that progresses from the local (various aspects of asset prices and monetary policy) to the overall (empirical analysis of macroeconomic models), then to country-specific (empirical analysis of the United States and Japan), and finally draws universal conclusions to establish a general analytical framework for the relationship between asset prices and monetary policy. It presents many unique insights and conclusions.