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It should also reduce asset boom-bust cycles since NGDP targets avoid destablizing responses to supply shocks that often fuel swings in asset prices.
If economic developments are satisfactory, the Fed will "likely reduce" asset purchases, Yellen said, but the program is "not on a preset course" and could shift as new data comes to light.
As commodity prices drop, less money will be available for investment by commodity producers, which will reduce asset prices further.
The difference between real system responses and simulation model responses during a real-world event indicates the model's deficiency, which can cause conservative operation and reduce asset utilization.
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Option two is to sell off non-core assets or reduce assets in their risky trading books.
NEW YORK TIMES European Banks Move to Bolster Capital || Five years after the financial crisis, European regulators are pressuring banks to reduce assets and increase capital, Bloomberg News writes.
They might want to raise cash to pay for possible medical expenses down the line or to reduce assets so a parent needing health aides or nursing-home care will be eligible for Medicaid.
Barclays also said it would reduce assets on its balance sheet by as much as £80 billion and use part of its profits to improve its leverage ratio to 3 percent by June 2014.
"Write-downs on unrealised losses are far more than an accounting blemish they are a direct hit to earnings on the income statement, and reduce assets and shareholder equity on the balance-sheet," says Steven Towns, a Japanese-equities specialist.
Poor investment performance can reduce assets and thus the fees connected to them.
Banks below the ratio need to increase stable sources of funding and to reduce assets requiring funding.
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