Turning now to inflation, there has also been an upside surprise (Graph 5). The pick-up in inflation reflects both the strength of the economic recovery and the significant disruptions on the supply side.
Changes in asset prices will in turn (via wealth effects) affect the saving and spending behaviour of economic agents. Furthermore, financial innovation, for example in the form of new credit risk transfer products, created more investment opportunities for all market participants. This may have induced a more risk-taking investment behaviour and may have amplified asset price developments by  1  See e.g.