TY  - JOUR
AU  - Bernanke,Ben
AU  - Gertler,Mark
TI  - Monetary Policy and Asset Price Volatility
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7559
PY  - 2000
Y2  - February 2000
UR  - http://www.nber.org/papers/w7559
L1  - http://www.nber.org/papers/w7559.pdf
N1  - Author contact info:
Ben S. Bernanke
E-Mail: Rita.C.Proctor@frb.gov

Mark Gertler
Department of Economics
New York University
269 Mercer Street, 7th Floor
New York, NY 10003
Tel: 212/998-8931
Fax: 212/995-4186
E-Mail: mark.gertler@nyu.edu
AB  - We explore the implications of asset price volatility for the management of monetary policy. We show that it is desirable for central banks to focus on underlying inflationary pressures. Asset prices become relevant only to the extent they may signal potential inflationary or deflationary forces. Rules that directly target asset prices appear to have undesirable side effects. We base our conclusions on (i) simulation of different policy rules in a small scale macro model and (ii) a comparative analysis of recent U.S. and Japanese monetary policy.
ER  -