Frank Browne


Frank BrowneFrank Browne is Senior Advisor to the Governor, Central Bank of Ireland. He has previously worked as Senior Economist at the OECD (1988–1992), as Deputy Head of Stage 3 (EMU) Division at the European Monetary Institute (1994– 1998), and as Advisor to the Research Directorate at the European Central Bank (1998–2000). He has been a member of the ECB Monetary Policy Committee and the ECB Bank Supervision Committee in recent years. His research has been published in journals such as the European Economic Review, Review of Economics and Statistics and The Manchester School, among others.




Papers Published in World Economics:


The New Dynamic Between US Stock Prices and Money Holdings

The financial crisis has had the effect of focusing attention on the role of liquidity, but more specifically excess liquidity, in driving asset prices to unsustainable bubble levels. We think this focus is fully warranted. However, we consider that, in this critical relationship between money and other financial assets, it is only half the story. Little attention has been devoted to date to examining whether this same money–financial asset interaction might also be responsible for the excess liquidity having been generated in the first place. We argue that it is. A new dynamic is at play in which newly liberalised and democratised financial markets, a hugely expanded role for (Keynesian) liquidity preference (driven by an asset demand for money), and a monetary policy constrained to respond to threats to financial stability, play key roles. We present evidence, using asset pairing, money and equities, which is supportive of our argument. These results have important implications for both monetary policy and financial stability.

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