TY - BOOK ID - 84541264 TI - The Stock Market Channel of Monetary Policy AU - Cosimano, Thomas. AU - Fullenkamp, Connel. AU - Chami, Ralph. PY - 1999 SN - 1462354114 1452736170 1281604755 9786613785442 1451891806 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Finance: General KW - Inflation KW - Investments: Stocks KW - Macroeconomics KW - Money and Monetary Policy KW - Monetary Policy KW - Pension Funds KW - Non-bank Financial Institutions KW - Financial Instruments KW - Institutional Investors KW - Price Level KW - Deflation KW - General Financial Markets: General (includes Measurement and Data) KW - Monetary Policy, Central Banking, and the Supply of Money and Credit: General KW - Investment & securities KW - Finance KW - Monetary economics KW - Stocks KW - Stock markets KW - Monetary base KW - Asset prices KW - Financial institutions KW - Financial markets KW - Prices KW - Money KW - Stock exchanges KW - Money supply KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:84541264 AB - This paper argues that the stock market is an important channel of monetary policy. Monetary policy affects real economic activity because inflation levies a property tax on stocks in addition to an income tax on dividend payments. Inflation thus taxes stocks more heavily than it does bonds. Households alter their required rate of return as inflation changes, and firms adjust production in order to satisfy their shareholders’ demands. As the stock market channel grows in importance, the appropriate intermediate target for the central bank is the price level, with price stability being the ultimate goal. ER -