The Interaction of Monetary and Macroprudential Policies - Background Paper
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Summary:
This paper provides background material to support the Board paper on the interaction of monetary and macroprudential policies. It analyzes the scope for and evidence on interactions between monetary and macroprudential policies. It first reviews a recent conceptual literature on interactive effects that arise when both macroprudential and monetary policy are employed. It goes on to explore the “side effects” of monetary policy on financial stability and their implications for macroprudential policy. It finally addresses the strength of possible effects of macroprudential policies on output and price stability, and draws out implications for the conduct of monetary policy.
Series:
Policy Papers
Subject:
Background papers Brazil Financial stability Financial systems Inflation targeting Korea, Republic of Macroprudential policy Monetary policy Price stabilization Turkey United States
English
Publication Date:
December 27, 2012
Format:
Paper
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