The impact of interest rate policy on individual expectations and asset bubbles in experimental markets

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 lowe...

وصف كامل

محفوظ في:
التفاصيل البيبلوغرافية
المؤلفون الرئيسيون: Bao, Te, Zong, Jichuan
مؤلفون آخرون: School of Social Sciences
التنسيق: مقال
اللغة:English
منشور في: 2020
الموضوعات:
الوصول للمادة أونلاين:https://hdl.handle.net/10356/142772
الوسوم: إضافة وسم
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المؤسسة: Nanyang Technological University
اللغة: English
الوصف
الملخص: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.