Asset Prices and the Financial Crisis of 2007-09: An Overview of Theories and Policies

Forum for Social Economics, Vol. 39, No. 3, pp. 279-286, 2010

10 Pages Posted: 25 Jan 2011 Last revised: 28 Jan 2011

See all articles by A. (Tassos) G. Malliaris

A. (Tassos) G. Malliaris

Loyola University of Chicago - Department of Economics

Marc D. Hayford

Loyola University of Chicago - Department of Economics

Date Written: January 28, 2010

Abstract

The financial crisis of 2007-09 has led to a rethinking of the role of monetary and financial regulatory policy. It has also called into question the benefits of financial innovation and monetary policy that focuses solely on inflation and the output gap. This paper discusses financial instabilities in general, the recent financial crisis as well as the appropriate role of monetary and financial regulatory policy in dealing with asset bubbles. The paper concludes by evaluating appropriate policies to reduce the economic impact of future financial crises.

Keywords: Asset Bubbles, Financial Crisis, Regulation

JEL Classification: E50, E52, E58

Suggested Citation

Malliaris, A. (Tassos) G. and Hayford, Marc D., Asset Prices and the Financial Crisis of 2007-09: An Overview of Theories and Policies (January 28, 2010). Forum for Social Economics, Vol. 39, No. 3, pp. 279-286, 2010. Available at SSRN: https://ssrn.com/abstract=1747118 or http://dx.doi.org/10.2139/ssrn.1747118

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)

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)

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