From the internal angle, asset price fluctuation caused possibly by financial innovation, credit and liquidity and investors could lead to financial instability and macro economic fluctuation. We should give attention to asset price and its fluctuation and adopt proper instrument that could burst the price bubble when formulating monetary policy. Currently, asset price in China goes up and down frequently with the sustained economic development, unceasing appreciation of RMB and on-going urbanization. In this connection, China should establish a system of asset price bubble warning index to of...
