Macroprudential and Monetary Policy Rules: a Welfare Analysis
type="main"> <p>This paper studies the interaction between macroprudential and monetary policies, using a DSGE model with a housing market and collateral constraints. Monetary policy follows a standard Taylor rule for the interest rate. The macroprudential authority implements a Taylor-type rule for the loan-to-value, ratio reacting to output and house prices. Results show that introducing the macroprudential rule or extending the interest-rate rule to respond to house prices increases welfare, since it enhances financial stability. However, for the optimal policy mix, when both policies act together, monetary policy should ensure price stability while the macroprudential authority should safeguard financial stability.
Year of publication: |
2015
|
---|---|
Authors: | Rubio, Margarita ; Carrasco-Gallego, José A. |
Published in: |
Manchester School. - School of Economics, ISSN 1463-6786. - Vol. 83.2015, 2, p. 127-152
|
Publisher: |
School of Economics |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Macroprudential and monetary policy rules : a welfare analysis
Rubio, Margarita, (2015)
-
Macroprudential and monetary policies : implications for financial stability and welfare
Rubio, Margarita, (2014)
-
The macroprudential countercyclical capital buffer in Basel III : implications for monetary policy
Carrasco Gallego, José Antonio, (2018)
- More ...