How Complementary Are Prudential Regulation and Monetary Policy?

Canuto, Otaviano

World Bank, Washington, DC

关键词: ACCUMULATION OF RESERVES;    AGGREGATE DEMAND;    ARBITRAGE;    ASSET PRICE;    ASSET PRICE BOOMS;   

RP-ID  :  62592

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Could either monetary policy orfinancial prudential regulation be relied on individually tomitigate asset price cycles or their effects? If both waysare effective, monetary policy and prudential regulationcould then be considered 'substitutes,' in thesense that the individual use of either instrument leads toa reduction in the volatility of both corresponding targets.This note, however, argues in favor of complementarilyrather than substitution in the use of monetary andmacro-prudential policies: the combined (articulate) use ofboth policies tends to be more effective than a standaloneimplementation of either.