Get ready for the Fed lift-off: The role of macroprudential policy

Gulcin Ozkan and Filiz Unsal

Discussion Papers from Department of Economics, University of York

Abstract: This paper explores how best a small open economy can defend against a foreign interest rate rise, such as the impending Fed lift-off. We find that a broad based macroprudential policy is the mosteffective tool in containing fluctuations arising from the interest rate shock, hence yielding the lowest loss in welfare.

Keywords: Foreign interest rates; emerging markets; monetary pol-icy; macroprudential measures; capital controls. (search for similar items in EconPapers)
JEL-codes: E5 F3 F4 G1 (search for similar items in EconPapers)
Date: 2015-10
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:yor:yorken:15/25

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