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Explore the dynamics of asset price inflation, including stock and house price booms, driven by various factors like monetary policy and herd behavior. Unravel the risks and rewards shaping current market trends.
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1. CIB/feb08/lec1+2/fot 1 Markets, risks & “rewards”. What is happening today?
2. CIB/feb08/lec1+2/fot 2 Peter Fonkert E-mail: p.fonkert@chello.nl
Website: www.innorec.nl
3. CIB/feb08/lec1+2/fot 3 Asset price inflation Dynamic process Impulse: - stock price boom (accommodative monetary policy, financial deregulation, new IT economy,…) - house price boom (low interest rates, supply/ demand conditions, easing of credit conditions) Asset price bubble develops because of … herd behaviour and adaptive expectations role of chartists asymmetric investment advises from analysts