Quantifying the Policy Mix in a Monetary Union with National Macroprudential Policies

Matthieu Darracq Paries, Elena Rancoita and Christoffer Kok

Financial Stability Review, 2015, vol. 2

Abstract: In a monetary union, targeted national macroprudential policies can be necessary to address asymmetric financial developments that are outside the scope of the single monetary policy. This special feature discusses and, using a two-country structural model, provides some model-based illustrations of the strategic interactions between a single monetary policy and jurisdiction-specific macro-prudential policies. Counter-cyclical macro-prudential interventions are found to be supportive to monetary policy conduct through the cycle. This complementarity is significantly reinforced when there are asymmetric financial cycles across the monetary union. JEL Classification: G00

Keywords: asymmetric financial developments; jurisdiction-specific macroprudential policies; macroprudential policies; single monetary policy (search for similar items in EconPapers)
Date: 2015-11
Note: 604093
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:fsrart:2015:0002:4

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