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Leaning against the wind: macroprudential policy and the financial cycle

Gespeichert in:

Personen und Körperschaften: Kockerols, Thore (VerfasserIn), Kok Sørensen, Christoffer (VerfasserIn)
Titel: Leaning against the wind: macroprudential policy and the financial cycle/ Thore Kockerols, Christoffer Kok
Format: E-Book
Sprache: Englisch
veröffentlicht:
Frankfurt am Main, Germany European Central Bank [2019]
Gesamtaufnahme: Europäische Zentralbank: Working paper series ; no 2223 (January 2019)
Schlagwörter:
Quelle: Verbunddaten SWB
Lizenzfreie Online-Ressourcen
Details
Zusammenfassung: Should monetary policy lean against financial stability risks? This has been a subject of fierce debate over the last decades. We contribute to the debate about "leaning against the wind" (LAW) along three lines. First, we evaluate the cost and benefits of LAW using the Svensson (2017) framework for the euro area and find that the costs outweigh the benefits. Second, we extend the framework to address a critique that Svensson does not consider the lower frequency financial cycle. Third, we use this extended framework to assess the costs and benefits of monetary and macroprudential policy. We find that macroprudential policy has net marginal benefits in addressing risks to financial stability in the euro area, whereas monetary policy has net marginal costs. This would suggest that an active use of macroprudential policies targeting financial stability risks would alleviate the burden on monetary policy to "lean against the wind".
Umfang: 1 Online-Ressource (circa 35 Seiten); Illustrationen
ISBN: 9789289934855
9289934859
DOI: 10.2866/744981