Arbeitspapier
Benefits of macro-prudential policy in low interest rate environments
I study macro-prudential policy intervention in economies with secularly low interest rates. Intervention boosts risk-free real interest rates unintentionally, simply as a by-product of containing systemic risk in financial markets. Thus, intervention also boosts the natural rate of return in particular (i.e., the equilibrium risk-free rate that is consistent with inflation on target and production at full capacity). These results point to a novel complementarity between financial stability and macroeconomic stabilization. Complementary is sufficiently strong to generate a divine coincidence if the natural rate is secularly low, but not too low.
- ISBN
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978-92-899-4415-1
- Language
-
Englisch
- Bibliographic citation
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Series: ECB Working Paper ; No. 2498
- Classification
-
Wirtschaft
Price Level; Inflation; Deflation
Business Fluctuations; Cycles
Financial Markets and the Macroeconomy
- Subject
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Macro-prudential Policy
Systemic Risk
Natural Rate of Return
- Event
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Geistige Schöpfung
- (who)
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Van der Ghote, Alejandro
- Event
-
Veröffentlichung
- (who)
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European Central Bank (ECB)
- (where)
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Frankfurt a. M.
- (when)
-
2020
- DOI
-
doi:10.2866/165350
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Van der Ghote, Alejandro
- European Central Bank (ECB)
Time of origin
- 2020
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