French research says monetary policy can offset herding

banquedefrance

A working paper, published by the Banque de France on December 13, finds that although central banks have less access to private information than investors, monetary policy interventions to deflate asset bubbles can still improve welfare.

The paper's authors, Olivier Loisel, Aude Pommeret and Franck Portier, develop a model that shows monetary policy can eliminate bubbles by adjusting the interest rate. While there is a risk that central bankers may incorrectly identify a bubble due to the

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: