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Abstract

Stock market rises and asset price inflation in ASEAN economies have raised the question of whether monetary authorities of these economies should act pre-emptively against these rising trends to prevent impending financial crises. Using a structural VECM 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 Type:	Report (Discussion Paper)
Authors/Creators:	Raghavan, M and Dungey, M
Keywords:	SVECM; monetary policy; stock market; ASEAN; repec
Publisher:	University of Tasmania
Additional Information:	Copyright 2014 The Authors
Item Statistics:	View statistics for this item

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