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Targeting Financial Stability: Macroprudential or Monetary Policy?
| Content Provider | Scilit |
|---|---|
| Author | Aikman, David Giese, Julia Kapadia, Sujit McLeay, Michael |
| Copyright Year | 2018 |
| Description | Journal: SSRN Electronic Journal This paper explores monetary-macroprudential policy interactions in a simple, calibrated New Keynesian model incorporating the possibility of a credit boom precipitating a financial crisis and a loss function reflecting financial stability considerations. Deploying the countercyclical capital buffer (CCyB) improves outcomes significantly relative to when interest rates are the only instrument. The instruments are typically substitutes, with monetary policy loosening when the CCyB tightens. We also examine when the instruments are complements and assess how different shocks, the effective lower bound for monetary policy, market-based finance and a risk-taking channel of monetary policy affect our results. |
| Related Links | https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp2278~a3eb7fea61.en.pdf https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=3192966 |
| ISSN | 10914358 |
| e-ISSN | 15565068 |
| DOI | 10.2139/ssrn.3192966 |
| Journal | SSRN Electronic Journal |
| Language | English |
| Publisher | Elsevier BV |
| Publisher Date | 2018-06-08 |
| Access Restriction | Open |
| Subject Keyword | Journal: SSRN Electronic Journal Financial Stability |
| Content Type | Text |
| Resource Type | Article |
| Subject | Public Health, Environmental and Occupational Health Psychiatry and Mental Health |
