Browsing by Subject "Asset price"

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    Financial stability under model uncertainty
    (Elsevier B.V., 2018) Kantur, Z.; Özcan, G.
    This paper studies how asset price model misspecification affects the conduct of monetary policy under commitment in a New Keynesian model using robust control techniques. We find that monetary policy reacts aggressively to both asset price and inflation shocks to guard herself against worst-case outcome.