The Stock Market Channel of Monetary Policy

Released on by Mr.Ralph Chami
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  • The Stock Market Channel of Monetary Policy Book Detail

  • Author : Mr.Ralph Chami
  • Release Date : 1999-02-01
  • Publisher : International Monetary Fund
  • Genre : Business & Economics
  • Pages : 26
  • ISBN 13 : 145184395X
  • File Size : 85,85 MB
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The Stock Market Channel of Monetary Policy by Mr.Ralph Chami PDF Summary

Book Description: This paper argues that the stock market is an important channel of monetary policy. Monetary policy affects real economic activity because inflation levies a property tax on stocks in addition to an income tax on dividend payments. Inflation thus taxes stocks more heavily than it does bonds. Households alter their required rate of return as inflation changes, and firms adjust production in order to satisfy their shareholders’ demands. As the stock market channel grows in importance, the appropriate intermediate target for the central bank is the price level, with price stability being the ultimate goal.

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The Stock Market Channel of Monetary Policy

The Stock Market Channel of Monetary Policy

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This paper argues that the stock market is an important channel of monetary policy. Monetary policy affects real economic activity because inflation levies a pr

Inflation Expectations

Inflation Expectations

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Inflation is regarded by the many as a menace that damages business and can only make life worse for households. Keeping it low depends critically on ensuring t