Consider a situation where central bank offi cials repeatedly express concern that output exceeds potential output and

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Consider a situation where central bank offi cials repeatedly express concern that output exceeds potential output and that the economy is overheating. Although they haven’t implemented any policy moves as yet, the data show that consumption of luxury goods has begun to slow. Explain how this behavior could refl ect the asset-price channel of monetary policy at work.

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Money Banking And Financial Markets

ISBN: 9780073375908

3rd Edition

Authors: Stephen Cecchetti, Kermit Schoenholtz

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