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Should ASEAN-5 monetary policy-makers act preemptively against stock market bubbles?


Raghavan, M and Dungey, M, Should ASEAN-5 monetary policy-makers act preemptively against stock market bubbles?, Applied Economics, 47, (11) pp. 1086-1105. ISSN 0003-6846 (2015) [Refereed Article]

Copyright Statement

Copyright 2014 Taylor & Francis

DOI: doi:10.1080/00036846.2014.990622


Stock market rises and asset price inflation in ASEAN economies have raised the question of whether monetary authorities in these economies should act pre-emptively against these rising trends to prevent impending financial crises. Using structural vector error correction models (SVECMs) which incorporate mixed data characteristics, we examine the effects and interactions between monetary policy and stock market shocks for Singapore, Malaysia, Thailand, Indonesia and the Philippines. The results suggest that monetary policy focused on the stock market detracts from price stability objectives, in particular because containing a stock market bubble may inadvertently depress output and inflation.

Item Details

Item Type:Refereed Article
Keywords:SVECM; monetary policy; stock market; ASEAN
Research Division:Economics
Research Group:Applied economics
Research Field:Macroeconomics (incl. monetary and fiscal theory)
Objective Division:Economic Framework
Objective Group:Macroeconomics
Objective Field:Monetary policy
UTAS Author:Raghavan, M (Dr Mala Raghavan)
UTAS Author:Dungey, M (Professor Mardi Dungey)
ID Code:97597
Year Published:2015
Web of Science® Times Cited:3
Deposited By:TSBE
Deposited On:2014-12-29
Last Modified:2018-04-05

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