01732cas a2200265 a 4500 AALejournalIMF007562 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451843958 1018-5941 BD-DhAAL BD-DhAAL Cosimano, Thomas. The Stock Market Channel of Monetary Policy / Thomas Cosimano, Connel Fullenkamp, Ralph Chami. Washington, D.C. : International Monetary Fund, 1999. 1 online resource (25 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students 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. Mode of access: Internet Chami, Ralph. Fullenkamp, Connel. IMF Working Papers; Working Paper ; No. 1999/022 Full text available on IMF http://elibrary.imf.org/view/journals/001/1999/022/001.1999.issue-022-en.xml IMF e-Library