The interaction of monetary and macroprudential policies
Silvo, Aino (17.06.2019)
Tässä tietueessa ei ole tiedostoja, ainoastaan metadata.
Volyymi
51Numero
4 ; June
2019
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:bof-201908191422Tiivistelmä
I analyze a New Keynesian dynamic stochastic general equilibrium (DSGE) model where the financing of productive investment is affected by a moral hazard problem. I solve for jointly Ramsey‐optimal monetary and macroprudential policies. I find that when a financial friction is present in addition to the standard nominal friction, the optimal policy can replicate the first‐best allocation if the social planner can conduct both monetary and macroprudential policy. Using monetary policy alone is not enough: a policy trade‐off between stabilizing inflation and output gap emerges. When policy follows simple rules, the source of fluctuations is relevant for the choice of the appropriate policy mix.
Julkaisuhuomautus
Published in Bank of Finland Research Discussion Papers 1/2016.