On the Interplay between Monetary Policy and Macroprudential Policy: A Simple Analytical Framework

Øistein Røisland
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Øistein Røisland: Norges Bank (Central Bank of Norway)

No 2017/18, Working Paper from Norges Bank

Abstract: The paper provides a simple analytical framework for analyzing the interplay between monetary policy and macroprudential policy. Three questions are analyzed: (i) Under which assumptions is coordination necessary to implement an optimal policy mix? (ii) Are the two policy instruments substitutes or complements, i.e. should they move in opposite or the same direction as response to a shock? (iii) Can "leaning against the wind" in monetary policy lead to a negative inflation bias?

Keywords: Monetary policy; Macroprudential policy; Coordination (search for similar items in EconPapers)
JEL-codes: E52 E58 E61 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2017-10-02
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:bno:worpap:2017_18

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