@techreport{Tootell2004Eyes,
abstract = {The appropriate role for equity prices in monetary policy deliberations has been hotly
debated for some time. Recent work suggests that equity prices have affected monetary
policy decisions above and beyond their indirect effect on the traditional goal variables
of the FOMC. However, the correlation between stock price movements and these other
goal variables has made the identification of the equity price effect problematic.
Previous studies have used a forecast that embodies a different information set from the
one used by the FOMC, which could bias the estimated coefficient on equity prices. The
authors show that, in fact, the methods used in the earlier literature fail to adequately
disentangle the observational equivalence problem. The authors then show that after
controlling for the information that actually enters the FOMCfs decision]making process,
equity prices have had no independent effect on monetary policy.},
author = {Geoff Tootell and Jeff Fuhrer},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {E61; E52; 330; monetary policy; policy rules; asset prices; Geldpolitik; Regelgebundene Politik; B\"{o}rsenkurs; Aktienmarkt; USA},
language = {eng},
number = {04,2},
title = {Eyes on the Prize: How Did the Fed Respond to the Stock Market?},
type = {Public policy discussion papers / Federal Reserve Bank of Boston},
url = {http://hdl.handle.net/10419/23448},
year = {2004}
}
