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dc.contributor.authorTomura, Hajimeen_US
dc.date.accessioned2011-12-15T12:58:31Z-
dc.date.available2011-12-15T12:58:31Z-
dc.date.issued2009en_US
dc.identifier.urihttp://hdl.handle.net/10419/53941-
dc.description.abstractThis paper uses a small-open economy model for the Canadian economy to examine the optimal Taylor-type monetary policy rule that stabilizes output and inflation in an environment where endogenous boom-bust cycles in house prices can occur. The model shows that boom-bust cycles in house prices emerge when credit-constrained mortgage borrowers expect that future house prices will rise and this expectation is neither shared by savers nor realized ex-post. These boom-bust cycles replicate the stylized features of housing-market boom-bust cycles in industrialized countries. In an environment where mortgage borrowers are occasionally over-optimistic, the central bank should be less responsive to inflation, more responsive to output, and slower to adjust the nominal policy interest rate. This optimal monetary policy rule dampens endogenous boom-bust cycles in house prices, but prolongs inflation target horizons due to weak policy reactions to inflation fluctuations after fundamental shocks.en_US
dc.language.isoengen_US
dc.publisherBank of Canada Ottawaen_US
dc.relation.ispartofseriesBank of Canada Working Paper 2009,32en_US
dc.subject.jelE44en_US
dc.subject.jelE52en_US
dc.subject.ddc330en_US
dc.subject.keywordCredit and credit aggregatesen_US
dc.subject.keywordFinancial stabilityen_US
dc.subject.keywordInflation targetsen_US
dc.subject.stwKonjunkturen_US
dc.subject.stwImmobilienpreisen_US
dc.subject.stwGeldpolitiken_US
dc.subject.stwGesamtwirtschaftliche Produktionen_US
dc.subject.stwInflationsrateen_US
dc.subject.stwTaylor-Regelen_US
dc.subject.stwKleines-offenes-Landen_US
dc.subject.stwKanadaen_US
dc.titleOptimal monetary policy during endogenous housing-market boom-bust cyclesen_US
dc.typeWorking Paperen_US
dc.identifier.ppn618954791en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Bank of Canada Working Papers

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