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A tale of five bubbles - asset price inflation and central bank policy in historical perspective

Voth, Hans-Joachim


This paper examines five bubbles that eventually popped, and discusses the feasibility of central bank policy. In all cases, we find that monetary policy was too loose during the period when the bubble was developing, and that a determined switch from an accommodating to a tight stance caused “the music to stop”. We argue that despite the severe real effects of asset bubbles in all five examples, the case for targeting them explicitly is weak. Policy was flawed because it failed to pay...[Show more]

CollectionsANU Research Publications
Date published: 2000
Type: Working/Technical Paper


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