Mendicino, Caterina; Punzi, Maria Teresa - In: Journal of Banking & Finance 49 (2014) C, pp. 337-355
This paper evaluates the monetary and macroprudential policies that mitigate the procyclicality arising from the interlinkages between current account deficits and financial vulnerabilities. We develop a two-country dynamic stochastic general equilibrium (DSGE) model with heterogeneous...