Monetary and Macroprudential Policies Considering Business and Financial Cycles (in Korean)

Yong Min Kim () and Jung Yeoun Lee ()
Additional contact information
Yong Min Kim: Monetary Policy & Markets Department, The Bank of Korea
Jung Yeoun Lee: Financial Stability Department, Bank of Korea

Economic Analysis (Quarterly), 2015, vol. 21, issue 1, 125-143

Abstract: For the maximization of the social welfare, it is critical to choose an optimal coordination between monetary and macroprudential policies depending on the phase of business and financial cycles in which the current economy is placed. In this context, we examine a conceptual framework of operation of monetary and macroprudential policies considering business and financial cycles. In general, it is known that monetary policy is better suited for stabilizing the real economic fluctuations while macroprudential policy for preserving financial stability. However, the use of each policy needs to consider the effects from monetary policy on financial stability and from macroprudential policy on real economic stability. When business and financial cycles are in the same phase, it is desirable for each policy to be implemented with a lower intensity than the case where monetary and macroprudential policies target business and financial cycles respectively. On the contrary, when business and financial cycles are in the different phase, each policy should be performed with a greater intensity.

Keywords: Business cycle; Financial cycle; Monetary policy; Macroprudential policy (search for similar items in EconPapers)
JEL-codes: E32 E44 E52 E61 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bok.or.kr/ucms/cmmn/file/fileDown.do?m ... 00001016824&fileSn=1 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bok:journl:v:21:y:2015:i:1:p:125-143

Access Statistics for this article

Economic Analysis (Quarterly) is currently edited by Wook Sohn, Hwan-koo Kang and Jaerang Lee

More articles in Economic Analysis (Quarterly) from Economic Research Institute, Bank of Korea Contact information at EDIRC.
Bibliographic data for series maintained by Economic Research Institute ().