Macroeconomic Stability, Financial Stability, and Monetary Policy Rules
This paper reviews arguments for and against attributing explicitly a financial stability objective to monetary policy. The discussion is conducted from the perspective of middle-income countries (MICs), where bank credit plays a critical role both on the supply and demand sides. It also discusses, assuming that a more proactive role is desirable, what monetary policy should react to, to what extent it should be combined with macroprudential regulation (and possibly capital controls), and whether existing models provide adequate benchmarks for studying how these policies interact. The analysis suggests that, on balance, there may be a good case for monetary policy in MICs to go beyond its conventional mandate and address the time dimension of systemic risk—if only during a transitory period, as more is learnt about the implementation and performance of the new macroprudential rules that are currently being discussed.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 15 (2012)
Issue (Month): 2 (06)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=1367-0271|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=1367-0271|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pierre-Richard & K. Alper & L. Pereira da Silva, 2011.
"Capital Requirements and Business Cycles with Credit Market Imperfections,"
Working Papers Series
231, Central Bank of Brazil, Research Department.
- Agénor, P.-R. & Alper, K. & Pereira da Silva, L., 2012. "Capital requirements and business cycles with credit market imperfections," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 687-705.
- Agénor, P.-R. & Alper, K. & Pereira da Silva, L., 2009. "Capital requirements and business cycles with credit market imperfections," Policy Research Working Paper Series 5151, The World Bank.
- Pierre-Richard Agénor & Koray Alper & Luiz Pereira da Silva, 2009. "Capital Requirements and Business Cycles with Credit Market Imperfections," Centre for Growth and Business Cycle Research Discussion Paper Series 124, Economics, The Univeristy of Manchester.
- Ricardo J. Caballero, 2010.
"Macroeconomics after the Crisis: Time to Deal with the Pretense-of-Knowledge Syndrome,"
NBER Working Papers
16429, National Bureau of Economic Research, Inc.
- Ricardo J. Caballero, 2010. "Macroeconomics after the Crisis: Time to Deal with the Pretense-of-Knowledge Syndrome," Journal of Economic Perspectives, American Economic Association, vol. 24(4), pages 85-102, Fall.
- Broto, Carmen & Díaz-Cassou, Javier & Erce, Aitor, 2011. "Measuring and explaining the volatility of capital flows to emerging countries," Journal of Banking & Finance, Elsevier, vol. 35(8), pages 1941-1953, August.
- Clark, Peter B. & Goodhart, Charles A. E. & Huang, Haizhou, 1999.
"Optimal monetary policy rules in a rational expectations model of the Phillips curve,"
Journal of Monetary Economics,
Elsevier, vol. 43(2), pages 497-520, April.
- Haizhou Huang & Peter B Clark & Charles Goodhart, 1996. "Optimal Monetary Policy Rules in a Rational Expectations Model of the Phillips Curve," FMG Discussion Papers dp247, Financial Markets Group.
- Katrin Assenmacher-Wesche & Stefan Gerlach, 2010. "Monetary policy and financial imbalances: facts and fiction," Economic Policy, CEPR;CES;MSH, vol. 25, pages 437-482, 07.
- Akira Ariyoshi & Andrei Kirilenko & Inci Ã–tker & Bernard Laurens & Jorge IvÃ¡n Canales Kriljenko & Karl Friedrich Habermeier, 2000. "Capital Controls: Country Experiences with Their Use and Liberalization," IMF Occasional Papers 190, International Monetary Fund.
- Alan S. Blinder, 2010.
"How Central Should the Central Bank Be?,"
Journal of Economic Literature,
American Economic Association, vol. 48(1), pages 123-133, March.
When requesting a correction, please mention this item's handle: RePEc:bla:intfin:v:15:y:2012:i:2:p:205-224. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.