Asset Prices, Monetary Policy, and the Business Cycle

IMF Policy Discussion Papers, March 1, 1994

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Asset Prices, Monetary Policy, and the Business Cycle

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Bibliographic details

• Authors: Garry J. Schinasi
• Published: March 1, 1994
• Series: IMF Policy Discussion Papers
• DOI: https://doi.org/10.5089/9781451971927.003

Overview and scope

• Title: Asset Prices, Monetary Policy, and the Business Cycle
• Author: Garry J. Schinasi
• Publication type: IMF Policy Discussion Papers (Paper on Policy Analysis and Assessment)
• Date of issuance: March 1, 1994
• Pages: 28
• Series: Policy Discussion Paper No. 1994/006
• Issue: 006
• Volume: 1994
• DOI: https://doi.org/10.5089/9781451971927.003
• Stock No: PPIEA0061994
• ISBN: 9781451971927
• ISSN: 1564-5193

Key findings and analysis

• The business cycle in several industrial countries during the period 1989-1993 was different from previous post World War II business cycles in important ways.
• The paper describes the unique character of the 1989-1993 cycle and examines important underlying structural and macroeconomic factors that contributed to those differences.
• Many structural changes were partly responsible for the overshooting of asset prices and private debt levels.
• The paper emphasizes that the extreme overshooting of asset prices and private debt could not have occurred without overexpansionary monetary and fiscal policies.
• The paper examines why inflationary pressures were allowed to accumulate during this episode.

Policy implications and recommendations

• The paper discusses a number of lessons for conducting economic policy in the 1990s, drawing on the analysis of structural factors, asset-price overshooting, and policy-induced inflationary pressures.
• As a Paper on Policy Analysis and Assessment, the author(s) welcome comments on the text and request that citations refer to a Paper on Policy Analysis and Assessment of the International Monetary Fund, mentioning the author(s) and the date of issuance.

Subject classification and keywords

• Subject: Asset prices, Business cycles, Economic growth, Financial markets, Inflation, Price adjustments, Prices, Securities markets
• Keywords: asset, asset accumulation, asset market activity, Asset prices, asset-market information, bank assets, Business cycles, Global, Inflation, monetary policy, PDP, price, Price adjustments, price movement, real asset, Securities markets

Source: IMF Policy Discussion Paper No. 1994/006, Garry J. Schinasi, March 1, 1994.