Dichotomy between Macroprudential Policy and Monetary Policy on Credit and Inflation | Zendy

Hyunduk Suh | Zendy

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Dichotomy between Macroprudential Policy and Monetary Policy on Credit and Inflation

Author(s) -

Hyunduk Suh

Publication year - 2012

Publication title -

ssrn electronic journal

Language(s) - English

Resource type - Journals

ISSN - 1556-5068

DOI - 10.2139/ssrn.2212221

Subject(s) - monetary policy , economics , determinacy , monetary economics , inflation (cosmology) , interest rate , taylor rule , inflation targeting , new keynesian economics , credit channel , real interest rate , forward guidance , keynesian economics , macroeconomics , central bank , physics , theoretical physics , mathematical analysis , mathematics

This paper compares macroprudential policy and monetary policy using a simple New Keynesian model with credit. Macroprudential policy is effective in stabilizing credit with limited impact on inflation. Monetary policy stabilizes inflation, but is ‘too blunt’ for credit stabilization.

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