This paper deals with some issues that recently arised from the puzzlingevolution of Stock Markets during the nineties, in particular from the sharpincrease of equity prices on the Nasdaq. We examine the hypothesis accordingto which such a bullish market could be explained by investors’ increasinglyoptimistic expectations about the ‘New economy’ perspectives. We thenanalyse to what extent the evolution of financial markets may have recentlyaffected aggregate demand in a stronger way than in the past. Using a simpleaggregate model with rational expectations, we finally show how monetarypolicy decisions should be influenced by such changes in the behaviour ofinvestors and consumers.
