Open AccessAsset prices - An Austrian Perspective
Author(s) -
Philipp Bagus
Publication year - 2021
Publication title -
procesos de mercado
Language(s) - English
Resource type - Journals
ISSN - 1697-6797
DOI - 10.52195/pm.v4i2.324
Subject(s) - asset (computer security) , mainstream , monetary policy , economics , perspective (graphical) , austrian school , economic bubble , business cycle , financial economics , capital asset pricing model , monetary economics , macroeconomics , political science , neoclassical economics , law , computer security , artificial intelligence , computer science
How asset prices should be taken into account in monetary policy is a controversial question in mainstream discussion. These mainstream positions can be differentiated into two broad perspectives: the proactive and the reactive views. The proactive view advocates pricking the asset price bubble, while the reactive view argues against monetary policy targeting asset prices. In this article the relation between asset prices and the Austrian business cycle theory is examined. Following this, a critique of both the proactive and reactive views is provided and implications for monetary policy are deduced.
Key words: Austrian Economics, Business Cycles, Asset Prices, Central Banks and their Policies.
JEL Classification: B53, E32, E58.