
A Primer on Macroprudential Policy
Poutineau, Jean-Christophe; Vermandel, Gauthier (2015), A Primer on Macroprudential Policy, Journal of Economic Education, 46, 1, p. 68-82. 10.1080/00220485.2014.980527
Type
Article accepté pour publication ou publiéDate
2015Journal name
Journal of Economic EducationVolume
46Number
1Publisher
Universitas Negeri Semarang
Pages
68-82
Publication identifier
Metadata
Show full item recordAuthor(s)
Poutineau, Jean-Christophe
Centre de recherche en économie et management [CREM]
Vermandel, Gauthier
Laboratoire d'Economie de Dauphine [LEDa]
Centre de recherche en économie et management [CREM]
Abstract (EN)
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.Subjects / Keywords
Financial frictions; macroeconomics; macroprudential policy; monetary policy; New Keynesian; optimal interest rate rulesRelated items
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