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Central bank independence and macro-prudential regulation

Kenichi Ueda () and Fabian Valencia ()

Economics Letters, 2014, vol. 125, issue 2, 327-330

Abstract: When a central bank is in charge of both price and financial stability, a new time-inconsistency problem may arise. Monetary policy may be abused to reduce the private sector’s real debt burden after a financial shock materializes.

Keywords: Monetary policy; Macro-prudential regulation; Central bank independence; Time-inconsistency (search for similar items in EconPapers)
JEL-codes: E58 G28 H11 (search for similar items in EconPapers)
Date: 2014
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Working Paper: Central Bank Independence and Macro-Prudential Regulation (2012) Downloads
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DOI: 10.1016/j.econlet.2013.12.038

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