Asset bubble
Central banks need not divine bubbles
According to this article by Samuel Brittan of the Financial Times, published Friday 28 July, the question of whether central bankers should target asset prices will not go away.
Bubbles caused by cheap cash menace world economy
According to this article from Reuters, published Tuesday 25 July, with cheap financing in abundance, financial bubbles are bound to keep building.
Have central banks sown the seeds of the next bust
In an article published Monday 3 July, Stephen Roach of Morgan Stanley says he is increasingly worried that history will not treat the recent record of central banking kindly.
Comment: The housing bubble debate
In a recent working paper for the Czech National Bank Stephen Cecchetti, an economist at Brandeis University concludes that "monetary policymakers have no choice but to face the risks posed by asset price bubbles head on".
ECB's Papademos on central banks in 21st century
In the speech 'Central banks in the 21st century' given on 8 June Lucas Papademos of the ECB said he agrees that asset price bubbles are difficult to identify in real time and are thus often only identified ex post.
Fed can't ignore stock, home prices says Bernanke
Fed chairman Ben Bernanke said in a written response to a senator that the US central bank cannot turn a blind eye to price changes for stocks and homes when deciding on interest rates, but should take action only when they threaten the overall economy.
Roach urges new monetary policy approach
In comments published on Monday 22 May, Stephen Roach of Morgan Stanley said he is worried that central banking's recent record will not be judged kindly by history.
The origins of bubbles in laboratory asset markets
The authors of this Atlanta Fed Working Paper, published May 2006, conduct experiments that are designed to investigate individual probability judgment error and speculative behaviour. They find that both factors contribute to the creation of asset price…
Comment: The US housing puzzle
A new NBER working paper finds that there is "little evidence" of housing bubbles in the US. The authors argue that even in the highest-price cities, housing is perhaps only slightly more expensive than average.
BOJ's Mizuno cautions on asset bubble risk
Bank of Japan policy board member Atsushi Mizuno has said that the BOJ's super-easy monetary policy may help produce an asset bubble in Japan, the Jiji Press news agency reported.
Comment: Greenspan's legacy
As the curtains are drawn on the Alan Greenspan era at the Federal Reserve, the debate over whether or not the Fed should have increased interest rates to curb asset bubbles rages on. This debate misses the extent to which the Fed's actions may have…
Norway paper on Monetary policy and asset prices
A recent Bank of Norway working paper investigates whether there is a case for asset prices in interest rates rules within a small econometric model of the Norwegian economy.
Yellen says Fed should not target asset bubbles
San Francisco Fed President Janet Yellen said on Friday 21 October that the Federal Reserve's interest rate policy should not target asset bubbles such as the U.S. housing market.
Fed's Greenspan on economic flexibility
In the speech 'Economic flexibility' given on 27 September Alan Greenspan of the Federal Reserve said asset bubbles fuelled by "market exuberance" invariably burst and policy-makers cannot safely pierce them.
COMMENT BY CENTRALBANKNET
The fear that demand in many leading economies has been sustained only by a housing and real estate "bubble" is often seen as one of the biggest risks facing monetary policymakers.
Interview with ECB's Papademos
In an interview published this week European Central Bank Vice-President Lucas Papademos told Handelsblatt that whenever possible, central banks should try to prevent the evolution of asset price bubbles. "In principle, prevention is better than cure."
Issing praises RBNZ's Bollard
European Central Bank chief economist Otmar issing has singled out New Zealand's Reserve Bank governor, Alan Bollard, for his innovative thinking on asset price bubbles.
Interview with Fed's Bernanke
In an extensive interview published this week, Federal Reserve governor Ben Bernanke talks about inflation targeting, asset bubbles, the Great Depression and other topics. He suggests the introduction of a number or a numerical range for inflation in the…
Welteke 'relaxed' on asset bubbles
Ernst Welteke, president of the Bundesbank, said on Sunday 7 March that he was "relaxed" on the issue of asset bubbles, a growing concern among central bankers in the wake of strong equity market gains over the last year.
Interview: Martin Feldstein
In conversation, Professor Feldstein discusses his worries for the European Central Bank's future, who is to blame for the bubble, the US payments deficit and the international monetary system.
The Bank is losing a house price game
ARTICLE - This article suggests that the Bank of England's interest rate strategy has gone wrong causing a house price bubble and that central bankers avoid discussion on asset price bubbles incase their collapse makes them look stupid.
Spotting the next asset price bubble
ARTICLE - A thoughtful article in last Friday's FT by John Calverly of American Express Bank suggests that an asset valuation committee should be set up to warn of potential asset price bubbles. Though Calverly was directing his remarks to the UK, it is…
CentralBankNet Monday Special Feature
SPECIAL FEATURE - In this weeks special feature CentralBankNet looks at moves which could see a shake up in the way the ECB investigates fraud.