Journal of Finance and Economics

Journal of Finance and Economics

ISSN: 2291-4951 (Print)    ISSN: 2291-496X (Online)

Volume 4 (2016), No. 4, Pages 24-35

DOI: 10.12735/jfe.v4n4p24

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Targeting Asset Bubbles: Evolution of Policies

Igor M. Tomic1  Johns Angelidis1 

1Tobin College of Business, St. John’s University, New York, USA


To Cite this Article     Article Views: 678     Downloads: 391  Since deposited on 2016-10-12


Before the Great Recession the policy was not to interfere with increases in asset values, and if any resulting asset bubble crashes led to financial instability, then policies would be enacted to help the recovery. The crash that led to the recent financial crisis changed the mind of many researchers as they more thoroughly investigated the present and the past crises concluding that more attention needs to be paid to financial stability. This involved microprudential policies, meaning policies that would stabilize financial firms, as well as experimentation with macroprudential policies whose purpose is to stabilize a specific sector. By stabilizing a sector, the hope is that no spill over would take place to destabilize the financial system.

JEL Classifications: E44, E65, M38

Keywords: asset price bubbles, financial stability, macroprudential policies, microprudential policies

To Cite this Article: Tomic, I. M., & Angelidis, J. (2016). Targeting asset bubbles: Evolution of policies. Journal of Finance and Economics, 4(4), 24-35.

Copyright © I. M. Tomic & J. Angelidis

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This article is published under license to Science and Education Centre of North America. This is an Open Access article distributed under the terms of the Creative Commons Attribution 4.0 International License.

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Targeting Asset Bubbles: Evolution of Policies