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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
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The interaction of monetary and macroprudential policies, Journal of Money, Credit and Banking 4 (June) (2018). Silvo, Aino

Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Silvo, Aino 
Number of authors
Status Published
Year of publication 2019 
Date 03.08.2018 
Name of article The interaction of monetary and macroprudential policies 
Name of journal Journal of Money, Credit and Banking
Volume of issue 51 
Number of issue 4 (June) 
Pages 859-894 
Abstract I analyze a New Keynesian dynamic stochastic general equilibrium (DSGE) model where the financing of productive investment is affected by a moral hazard problem. I solve for jointly Ramsey‐optimal monetary and macroprudential policies. I find that when a financial friction is present in addition to the standard nominal friction, the optimal policy can replicate the first‐best allocation if the social planner can conduct both monetary and macroprudential policy. Using monetary policy alone is not enough: a policy trade‐off between stabilizing inflation and output gap emerges. When policy follows simple rules, the source of fluctuations is relevant for the choice of the appropriate policy mix.
Free text descriptor in Finnish rahapolitiikka; makrovakauspolitiikka; makrovakaus; luotot; 
Free text descriptor in English monetary policy, macroprudential policy, credit cycles 
JEL-codes E32, E44, E52, G28 
ISSN / e-ISSN 0022-2879 
auki Internet addresses
Additional information First published online 3 August 2018.
Published 15 May 2019.
Notes BoF DP 1/2016 

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