M. D. Hayford

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The legislated goals of U.S. monetary policy are price stability and maximum employment. In setting monetary policy, does the Fed also consider the level of the stock market? This paper examines empirically if monetary policy, since the October 19, 1987 stock market crash, has been influenced by high valuations of the stock market. A close examination of(More)
alternative specifications of individu-als' risk preferences and using alternative specifications of the stochastic process for per capita consumption. I find that for a class of preferences used by Epstein Ž Ž. . and Zin J. Monetary Econom. 26 1990 , 387᎐407 , in an analysis of the equity premium puzzle, which display ''first-order'' risk aversion, the(More)
How did the Federal Reserve Bank react to the stock market bubble of the late 1990s? At a Symposium sponsored by the Federal Reserve Bank of Kansas City in Jackson Hole, Wyoming on August 30, 2002, Chairman Alan Greenspan remarked that economists do not currently have a way to measure a stock market bubble convincingly. He also argued that in the absence of(More)
Among the various shocks that may cause financial instabilities, the bursting of asset bubbles has received most attention during the last decade. This paper discusses the risk management of financial instabilities caused by asset price crashes and evaluates the appropriate role of central banks. After an asset bubble crashes, central banks typically ease(More)
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