Later in his career, Peter came up with innovative approaches to policy at the zero bound for interest rates, a potentially critical issue in a period of very low inflation. Asset prices Asset markets are of particular interest to policymakers as the transmission channel through which movements in money or short-term interest rates primarily affect the economy.
Because their prices incorporate market expectations for the future, they are also an area in which policy indicators might be found. The huge literature on speculative attacks in exchange markets started with Dale’s work with Steve Salant on gold.