Please use this identifier to cite or link to this item: https://hdl.handle.net/10356/142772
Title: The impact of interest rate policy on individual expectations and asset bubbles in experimental markets
Authors: Bao, Te
Zong, Jichuan
Keywords: Social sciences::Economic theory
Issue Date: 2019
Source: Bao, T., & Zong, J. (2019). The impact of interest rate policy on individual expectations and asset bubbles in experimental markets. Journal of Economic Dynamics and Control, 107, 103735-. doi:10.1016/j.jedc.2019.103735
Journal: Journal of Economic Dynamics and Control
Abstract: We run a learning-to-forecast experiment with an interest rate policy in which the interest rate will increase/lower sharply when the deviation of asset prices from the fundamental value moves above/below a threshold. Our results show that the average price deviation (“bubble”) is significantly lower in the treatments with the interest rate policy than in the baseline treatment without the policy. Additionally, our results suggest that the policy maintains its effectiveness regardless of whether the participants are informed about the policy objectives.
URI: https://hdl.handle.net/10356/142772
ISSN: 0165-1889
DOI: 10.1016/j.jedc.2019.103735
Rights: © 2019 Elsevier B.V. All rights reserved. This paper was published in Journal of Economic Dynamics and Control and is made available with permission of Elsevier B.V.
Fulltext Permission: open
Fulltext Availability: With Fulltext
Appears in Collections:SSS Journal Articles

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