Monetary and macroprudential policies under rules and discretion

Lien Laureys and Roland Meeks

No 702, Bank of England working papers from Bank of England

Abstract: We study the policy design problem faced by central banks with both monetary and macroprudential objectives. We find that a time-consistent policy is often superior to a widely studied class of simple monetary and macroprudential rules. Better outcomes result when interest rates adjust to macroprudential policy in an augmented monetary policy rule.

Keywords: Monetary policy; macroprudential policy; DSGE models (search for similar items in EconPapers)
JEL-codes: E44 E52 G28 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2017-12-21
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Monetary and macroprudential policies under rules and discretion (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:boe:boeewp:0702

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