asset prices

Central banks are debating whether they should extend their remit to spot asset price bubbles – but research from the Bank for International Settlements has just found that the ageing population will depress, if not reverse, price rises in future.

“In English speaking countries it seems that baby boomer purchases drove up house prices in the past, while their sales will drive real house prices down in the future,” writes author Előd Takáts. The US has apparently enjoyed an 80 basis point per annum (bppa) boost to date, but is facing a negative impact of 80bppa in future. Read more

Krishna Guha

The Fed will take asset prices into account when setting monetary policy, writes Krishna Guha of the Financial Times Read more

Chris Giles

In a characteristically combative speech today, Adam Posen, an external member of the Bank of England’s Monetary Policy Committee, insists interest rates are a blunt tool for combating asset price bubbles. He suggests property taxes instead, writes Chris Giles of the Financial Times, but fails to analyse whether these would work any better than interest rates Read more

Money Supply, a Financial Times blog, wraps up the news for Wednesday, October 21 Read more