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Macroprudential Policies in a Global Perspective

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  • Jeanne, Olivier

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.

Suggested Citation

  • Jeanne, Olivier, 2014. "Macroprudential Policies in a Global Perspective," CEPR Discussion Papers 9875, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:9875
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    More about this item

    Keywords

    Capital Controls; Capital Flows; International Policy Coordination; International Reserves; Liquidity Trap; Macroprudential Policy;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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