Finding the Right Tool for Dealing with Asset Price Booms - speech by Adam Posen

In a speech at the MPR Monetary Policy and Markets Conference in London today, Adam Posen - an external member of the Bank's Monetary Policy Committee - discusses how asset price booms might be addressed in the future.
Published on 01 December 2009

He rejects the notion that monetary policy should be used to tackle asset prices, and believes other tools are needed and better suited for the task. In addition to macroprudential policies - such as those outlined in a recent Bank of England discussion paper - Adam Posen suggests there is merit in considering tools that tackle asset prices directly. In particular, he discusses the idea of an automatic stabiliser for housing prices.

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