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The interaction between macroprudential and monetary policies: The cases of Norway and Sweden
Author(s) -
Cao Jin,
Dinger Valeriya,
GrodeckaMessi Anna,
Juelsrud Ragnar,
Zhang Xin
Publication year - 2021
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/roie.12507
Subject(s) - economics , monetary policy , monetary economics , norwegian , international economics , macroeconomics , linguistics , philosophy
To shed light on the interaction between macroprudential and monetary policies, we study the inward transmission of foreign monetary policy in conjunction with domestic macroprudential and monetary policies in Norway and Sweden. Using detailed bank‐level data, we show how Norwegian and Swedish banks’ lending reacts to monetary policy surprises arising abroad, controlling for the domestic macroprudential stance and the interaction between monetary and macroprudential policies. In both countries, domestic macroprudential policy helps mitigate the effects arising from foreign monetary surprises.