Forever blowing against asset bubbles

An issue of great importance to central banks and one that has drawn considerable public attention and comment of late is the proper role of asset prices in the determination of monetary policy. Recent research carried out by the European Central Bank (ECB), the Bank for International Settlements, in conjunction with other published research has been both challenging and stimulating. Most fluctuations in stock prices, real estate values and other asset prices pose no particular challenge to central banks because they are just some of the usual factors influencing the outlook for real ac...