Asset bubble
Three academics join China’s Monetary Policy Committee
The People’s Bank of China calls on three scholars to join rate-setting board
China to keep up T-bill purchases; cautious on gold
State Administration of Foreign Exchange chief Yi Gang says the country will not rely excessively on gold, adds that political relations with US will not affect Chinese treasury holdings
Bayesian reasoning in boom-bust cycles
Bank of Japan paper finds that investors cause inflations and deflations in asset prices when they base decisions on past experience of the market
BuBa’s Fabritius: monetary policy can’t stop bubbles
Bundesbank’s Hans Fabritius says monetary policy has limited capability to target asset bubbles
Two challenges for policy in the near future
Donald Kohn, vice chairman of the Federal Reserve Board, set out his views on the Fed’s exit and the potential to include asset prices and financial stability questions in monetary policy.
Rethinking risk aversion in asset-price models
San Francisco Fed shows measuring household risk aversion correctly is crucial for understanding asset prices
Housing cycles and the macroeconomy in the Middle East
International Monetary Fund paper calls for more research into the linkages between house prices and business, and an improvement to the range and precision of data
Taylor-rule author blasts Bernanke’s argument
Economist John Taylor says Bernanke was wrong to argue that low interest rates were not a factor in the housing bubble that led to the financial crisis
Fed’s Kohn on the links between macro and financial stability
Federal Reserve’s vice chairman notes crisis has illustrated two key lessons on the relationship between macroeconomic and financial stability
Bank of Korea – Financial Stability Report November 2009
Korean recovery rapid, with increases in quarterly growth rates and a revival in housing prices, says central bank report
Bernanke: low rates didn’t spur housing bubble
Federal Reserve’s Ben Bernanke says direct linkages between low federal funds rate and rise in house prices weak; fix regulation not monetary policy
East Asia will take its cue from Fed: Indonesia deputy
Budi Mulya, the deputy governor of Bank Indonesia, says it is crucial the Fed err on the side of caution in withdrawing accommodative measures; East Asia-Pacific region will watch it closely
CentralBanking.com panel: it’s too soon to exit
Charles Goodhart, Paul Mortimer-Lee, Lucrezia Reichlin and Gabriel Stein concur that dangers are greater from exiting too early than too late but warn that asset prices risk becoming over inflated
Monetary policy in preventing boom-bust housing cycles
Bank of Canada paper argues that central banks should react less to inflation and more to output to avoid making boom-bust cycles worse
US and UK too slow in tackling bubble: BoJ’s Yamaguchi
The Bank of Japan deputy governor says authorities’ task was complicated by the expansion of the shadow banking industry
China wary of a gold bubble
People’s Bank of China deputy governor says steadily climbing gold prices could decrease the attractiveness of the metal as a reserve asset
BoE should keep close eye on bubbles: Dale
Bank of England’s Spencer Dale says the central bank’s current policy stance increases the likelihood that asset prices may move out of line with their fundamental values
IMF to Hong Kong: beware of bubbles
International Monetary Fund looks at the potential macroeconomic implications for Hong Kong of accommodative monetary policy in the United States
Three-way split in Bank’s November QE decision
Minutes reveal calls for both a larger expansion and no change
IIF’s Abed: financial stability a central bank task
Institute of International Finance’s George Abed says the crisis casts the role of central banks in a new light
Fed’s Kohn rejects bubble claims
Fed deputy acknowledges carry trade but dismisses fears low rates are stoking asset-price bubbles
Asset price bubbles “catastrophic”: UK Chancellor
Alistair Darling, chancellor of the exchequer, says bubbles must be tackled before they get out of hand
Buba's Weber cautions on leaning against wind
Bundesbank's Axel Weber adds that financial stability is not just a buzzword
Shirakawa blames human nature for bubbles
Bank of Japan's Masaaki Shirakawa says bubbles' causes will eventually boil down to the human nature