The FOMC’s decision about whether to respond to those residual risks using the rather blunt tool of monetary policy will necessarily depend on a delicate probabilistic cost-benefit calculation. Thanks for listening. I look forward to taking your questions. References Campbell, John Y., and Robert J. Shiller. 1988. The Dividend-Price Ratio and Expectations of Future Dividends and Discount Factors.
Review of Financial Studies 1 (3): 195–228. Cochrane, John H. 1992. Explaining the Variance of Price-Dividend Ratios. Review of Financial Studies 5 (2): 243–80. Kocherlakota, Narayana R. 2012. Incomplete Labor Markets. Federal Reserve Bank of Minneapolis working paper. Moran, Pablo. 2013. Anticipation and Timing in Merger Waves. University of British Columbia working paper. 6  BIS central bankers’ speeches