Recent Monetary Policy in the U.S.: Risk Management of Asset Bubbles

Journal of Economic Asymmetries, Vol. 2, pp. 25-39, 2005

16 Pages Posted: 17 Jan 2008

See all articles by Marc D. Hayford

Marc D. Hayford

Loyola University of Chicago - Department of Economics

A. (Tassos) G. Malliaris

Loyola University of Chicago - Department of Economics

Abstract

Recently Chairman Greenspan (2003 and 2004) has discussed a risk management approach to the implementation of monetary policy. This paper explores the economic environment of the 1990s and the policy dilemmas the Fed faced given the stock boom from the mid to late 1990s to after the bust in 2000-2001. Drawing on Greenspan's comments about conducting monetary policy in the real world of risk and uncertainty, the paper assesses why US monetary policy was neutral with respect to the stock market boom.

Keywords: Monetary policy, stock market, risk management

JEL Classification: E52, E58, G18

Suggested Citation

Hayford, Marc D. and Malliaris, A. (Tassos) G., Recent Monetary Policy in the U.S.: Risk Management of Asset Bubbles. Journal of Economic Asymmetries, Vol. 2, pp. 25-39, 2005. Available at SSRN: https://ssrn.com/abstract=1084636

Marc D. Hayford

Loyola University of Chicago - Department of Economics ( email )

820 N. Michigan Ave.
Chicago, IL 60611
United States
312-915-6062 (Phone)
312-915-8508 (Fax)

A. (Tassos) G. Malliaris (Contact Author)

Loyola University of Chicago - Department of Economics ( email )

16 E. Pearson Ave
Quinlan School of Business
Chicago, IL 60611
United States
312-915-6063 (Phone)

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