Stabilizing non-fundamental asset price movements under discretion and limited information

Article Abstract:

A good monetary policy balances inflation and output, and maintains the interest rates at a stable level. An analysis of a situation where the asset prices are driven by irrational expectations of the financial markets is presented. Under such circumstances, the investments in markets become inefficient, which can defeat the very purpose of the monetary policy, forcing the central banks to take corrective measures.

Commodity & service prices, Asset & Risk Management, Asset Accounting, Prices and rates, Industrial productivity, Assets (Accounting), Company pricing policy, Productivity

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New perspectives on capital, sticky prices, and the Taylor principle

Article Abstract:

Using Keynesian models and firm-specific capital, the drawbacks in Taylor's principle of formulating the interest rates policy are highlighted. Taylor principle states that central bank should adjust the nominal interest rate faster than the current inflation. The model also examines the essential factors for monetary policy and provides an optimum solution in combination with Taylor principle.

Spain, Norway, Analysis, Usage, Capital, Keynesian economics

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Investment and interest rate policy: a discrete time analysis

Article Abstract:

The factors that should be considered by the central bank for formulating interest rate policy are examined. The effect of investment spending and monetary policy on determinacy in the economy is also examined. The need to address the future or forecasted inflation for achieving a definite interest rates in local economy is highlighted.

Investments

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