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Should monetary policy monitor risk premiums in financial markets?

Author

Listed:
  • Guangye Cao
  • Taeyoung Doh
  • Daniel Molling

Abstract

The authors examine whether risk premiums can predict future economic growth and whether monetary policy can influence risk premiums.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Guangye Cao & Taeyoung Doh & Daniel Molling, 2015. "Should monetary policy monitor risk premiums in financial markets?," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 7-30.
    • Handle: RePEc:fip:fedker:00022
    as

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    References listed on IDEAS

    as
    1. Ben S. Bernanke & Mark Gertler, 2001. "Should Central Banks Respond to Movements in Asset Prices?," American Economic Review, American Economic Association, vol. 91(2), pages 253-257, May.
    2. Emmanuel Farhi & Iván Werning, 2016. "A Theory of Macroprudential Policies in the Presence of Nominal Rigidities," Econometrica, Econometric Society, vol. 84, pages 1645-1704, September.
    3. Unknown, 2005. "Forward," 2005 Conference: Slovenia in the EU - Challenges for Agriculture, Food Science and Rural Affairs, November 10-11, 2005, Moravske Toplice, Slovenia 183804, Slovenian Association of Agricultural Economists (DAES).
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    6. Janet L. Yellen, 2014. "Monetary Policy and Financial Stability : a speech at the 2014 Michel Camdessus Central Banking Lecture, International Monetary Fund, Washington, D.C., July 2, 2014," Speech 812, Board of Governors of the Federal Reserve System (U.S.).
    7. Frank Smets, 2014. "Financial Stability and Monetary Policy: How Closely Interlinked?," International Journal of Central Banking, International Journal of Central Banking, vol. 10(2), pages 263-300, June.
    8. Tobias Adrian & Emanuel Moench & Hyun Song Shin, 2010. "Macro Risk Premium and Intermediary Balance Sheet Quantities," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 58(1), pages 179-207, August.
    9. Jeremy C. Stein, 2014. "Incorporating Financial Stability Considerations into a Monetary Policy Framework : a speech at the International Research Forum on Monetary Policy, Washington, D.C., March 21, 2014," Speech 796, Board of Governors of the Federal Reserve System (U.S.).
    10. Itamar Drechsler & Amir Yaron, 2011. "What's Vol Got to Do with It," The Review of Financial Studies, Society for Financial Studies, vol. 24(1), pages 1-45.
    11. Benjamin Chabot, 2014. "Is There a Trade-Off Between Low Bond Risk Premiums and Financial Stability?," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Aug.
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    Keywords

    Financial markets; Monetary policy;

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