Should this shift in expectations occur, the  4  Joshua Gallin (2004), "The Long-Run Relationship Between House Price and Rents," Finance and Economics Discussion Series 2004-50 (Washington: Board of Governors of the Federal Reserve System, September). 5  Jonathan McCarthy and Richard Peach (2004), "Are Home Prices the Next ‘Bubble’?" Federal Reserve Bank of New York, Economic Policy Review, vol. 10 (December), pp.
1-17. 6  Donald L. Kohn (2006), "Monetary Policy and Asset Prices," speech given at the European Central Bank Colloquium held in honor of Otmar Issing, March 16. BIS Review 118/2006  3  central bank would face a persistent inflation problem, one whose correction would likely require a prolonged period of tight monetary policy.