Norges Bank

Staff Memo

Credit, asset prices and monetary policy

Leif Brubakk and Gisle Natvik
Staff Memo

Based on the established literature, we develop a structural model for the Norwegian economy that incorporates feed-backs from asset prices and credit to the real economy. We then use this framework for policy analysis, focusing on the role of asset prices and credit under optimal simple monetary policy rules.

Staff Memos present reports and documentation written by staff members and affiliates of Norges Bank, the central bank of Norway. Views and conclusions expressed in Staff Memos should not be taken to represent the views of Norges Bank.

ISSN 1504-2596 (online)

Published 11 November 2010 14:10
Published 11 November 2010 14:10