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Macroprudential Policies in a Global Perspective

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  • Olivier Jeanne

    (Johns Hopkins University, Peterson Institute for International Economics, NBER and CEPR (E-mail: ojeanne@jhu.edu))

Abstract

This paper analyzes the case for the international coordination of macroprudential policies in the context of a simple theoretical framework. Both domestic macroprudential policies and prudential capital controls have international spillovers through their impact on capital flows. The uncoordinated use of macroprudential policies may lead to a "capital war" that depresses global interest rates. International coordination of macroprudential policies is not warranted, however, unless there is unemployment in some countries. There is scope for Pareto-improving international policy coordination when one part of the world is in a liquidity trap while the rest of the world accumulates reserves for prudential reasons.

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Bibliographic Info

Paper provided by Institute for Monetary and Economic Studies, Bank of Japan in its series IMES Discussion Paper Series with number 14-E-01.

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Date of creation: Feb 2014
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Handle: RePEc:ime:imedps:14-e-01

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Keywords: Macroprudential Policy; Capital Flows; Capital Controls; International Reserves; International Coordination; Liquidity Trap;

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  1. Olivier Jeanne & Arvind Subramanian & John Williamson, 2012. "Who Needs to Open the Capital Account?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 5119.
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  26. repec:dgr:uvatin:2011040 is not listed on IDEAS
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Blog mentions

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  1. L'improbable coordination des politiques macroprudentielles
    by ? in D'un champ l'autre on 2014-03-23 21:00:00

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