Ask a central banker what his main job is, and he (more rarely, she) will say it is to maintain price stability. A growing number of central banks have adopted formal targets for inflation. Even so, a debate has recently been raging about whether central banks should worry also about swings in the prices of assets not counted in most measures of inflation― notably, shares and housing. Some commentators (including The Economist) have argued that the Federal Reserve should have raised interest rates sooner in the late 1990s to let air out of America's stock-market bubble and curb an unsustainable boom in investment. The issue will be discussed at a conference on asset-price bubbles on April 22nd-24th at the Federal Reserve Bank of Chicago.
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