Arbeitspapier
Targeting financial stability: Macroprudential or monetary policy?
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.
- Sprache
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Englisch
- ISBN
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978-92-899-3540-1
- Erschienen in
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Series: ECB Working Paper ; No. 2278
Monetary Policy
Central Banks and Their Policies
Financial Crises
Financial Institutions and Services: Government Policy and Regulation
monetary policy
financial stability
countercyclical capital buffer
financial crises
credit boom
Giese, Julia
Kapadia, Sujit
McLeay, Michael
- DOI
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doi:10.2866/038222
- Handle
- Letzte Aktualisierung
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20.09.2024, 08:23 MESZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Aikman, David
- Giese, Julia
- Kapadia, Sujit
- McLeay, Michael
- European Central Bank (ECB)
Entstanden
- 2019