the international monetary fund ( imf ) has been publishing, since 2017, a regular survey on macroprudential policy measures ( imf 2018 ), which can be a good starting point for empirical work. second, in order to assess the effects of financial education, it is sufficient to link education received by an individual to outcomes at the individual level. assessing the effects of financial stability policies, in contrast, requires linking interventions that affect decisions at the micro - level to aggregate outcomes. focusing on the big picture and on the question of how micro - incentives and decisions add up to aggregate behaviour is thus needed. a related question is how frictions and biases that affect micro - level decision making aggregate up and affect financial stability, and how these frictions can be identified early on. uninformed investors will always be present in markets. the question is how important they are, quantitatively, for market outcomes. vissing - jorgensen ( 2004 ) argues that direct evidence on investors ’ beliefs is needed in order to determine which aspects of behavioural finance models are relevant and thus which models provide reliable input into policy debates. in typical environments, however, information about investors ’ beliefs is not seite 13 von 27 deutsche bundesbank, directorate general communications wilhelm - epstein - strasse 14, 60431 frankfurt am main, germany, tel : + 49 ( 0 ) 69 9566 3511 or 3512, fax : + 49 ( 0 ) 69 9566 3077 presse @ bundesbank. de, www. bundesbank. de reproduction permitted only if source is stated. available, and the question arises how to develop robust policy implications in such environments of limited information. essentially, this boils down to the question of how the need for policy interventions and the effects of policies that have been implemented can be assessed. designing appropriate strategies for impact assessments, both ex ante and ex post, can be an important contribution of research. teaching economic and financial knowledge well - designed financial education programmes can improve financial knowledge that is relevant for day - to - day decision making. in parallel, efforts should be made to improve teaching financial stability and to integrate this into curricula of universities. this provides the necessary academic background for macroprudential policies and analytical work related to financial stability to both, policymakers and academics. the challenge is that teaching financial stability requires input from many fields including micro - and macroeconomics, public finance, theory of regulation, or even competition

growth in the u. s. in the up - run to the financial crisis. this price behaviour is consistent with search models in which a small fraction of overly optimistic agents push up house prices ( piazessi and schneider 2009 ). essentially, these theoretical models link distorted expectations to excessive asset price bubbles and excessive household debt. empirical studies using aggregate data support seite 6 von 27 deutsche bundesbank, directorate general communications wilhelm - epstein - strasse 14, 60431 frankfurt am main, germany, tel : + 49 ( 0 ) 69 9566 3511 or 3512, fax : + 49 ( 0 ) 69 9566 3077 presse @ bundesbank. de, www. bundesbank. de reproduction permitted only if source is stated. the mechanisms stressed by these models, in particular the link running from asset price bubbles to financial crises ( reinhart and rogoff 2008, 2009 ; brunnermeier 2009 ). moreover, early warning models also link asset price and credit bubbles to financial crises ( beutel, list, and von schweinitz 2018 ). also, several asset pricing anomalies can be explained by the fact that households typically do not participate in financial markets directly but rather operate through financial intermediaries ( he and krishnamurty 2018 ). hence, the relevant marginal investor is not the individual household but the intermediaries facing various constraints. financial literacy and expectations essentially, all ingredients of financial crises – balance sheet effects, runs, and network effects – can be linked to and are potentially aggravated by limited financial knowledge. identifying the exact channel running from distorted micro - economic decisions to aggregate outcomes is inherently more difficult. one key question is whether financial literacy has an impact on the degree of distortions in expectations. empirical evidence supports that individuals with better financial education have less distorted expectations. for example, typical households ( in the u. s. ) are excessively optimistic during booms and excessively pessimistic after busts ( adam, marcet, and beutel 2017 ). at the same time, better informed professional investors do not suffer from the same systematic biases ( beutel 2017 ). moreover, experience with investing in financial markets ( in years ) and personal experiences ( good or bad past returns ) have a strong impact on households ’ expectations ( malmendier and nagel 2011 ; vissing - jorgensen 2004 ). financial experience, in turn, is related to higher financial knowledge.