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A Primer on Macroprudential Policy


  • Jean-Christophe Poutineau
  • Gauthier Vermandel


This article introduces macroprudential policy using a static New Keynesian Macroeconomics model with financial frictions. The authors analyze two related questions: First, they show how the procyclicality of financial factors, captured by the financial accelerator, amplifies the transmission of supply and demand shocks and impacts the intuition they get from a basic intermediate macroeconomics. Second, adopting an optimal policy perspective, they show how a policymaker may use macroprudential policy to complete monetary policy measures. Following the Mundellian Policy Assignment principle , macroprudential policy should be specialized to address the procyclicality problem to suppress welfare losses associated with the building of financial imbalances, thus helping monetary policy to concentrate on the output inflation tradeoff.

Suggested Citation

  • Jean-Christophe Poutineau & Gauthier Vermandel, 2015. "A Primer on Macroprudential Policy," The Journal of Economic Education, Taylor & Francis Journals, vol. 46(1), pages 68-82, March.
  • Handle: RePEc:taf:jeduce:v:46:y:2015:i:1:p:68-82
    DOI: 10.1080/00220485.2014.980527

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    Cited by:

    1. Salim, DEHMEJ & Leonardo, GAMBACORTA, 2017. "Macroprudential Policy in a Monetary Union," Document de travail 2017-4, Bank Al-Maghrib, D├ępartement de la Recherche.

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