Restriction on Monetary Policy to Prevent Asset Price Bubble——Case Study on Japan's Asset Price Bubble on the Early of 1990s

After breaking out of US Sub-prime mortgage crisis,the debates on whether the monetary policy could prevent asset price bubble are rising.In this article,we will examine the formation,boom and burst of Japan's asset price bubble in the 1990s and analyze the relationship between the monetary policy and asset price bubble.The result indicates that improper monetary policy closely relates to the asset price bubble and couldn't prevent its emergence.To tackle the problem,the central bank should perfect the surveillance on price level and use financial supervision tools to address the asset price bubble.