03441nam 2200613Ia 450 991082745370332120200520144314.01-4623-5878-097866128445151-4527-0969-61-282-84451-21-4518-7403-0(CKB)3170000000055388(EBL)1605979(SSID)ssj0000949341(PQKBManifestationID)11597094(PQKBTitleCode)TC0000949341(PQKBWorkID)10996013(PQKB)10556357(OCoLC)680613464(MiAaPQ)EBC1605979(IMF)WPIEE2009257(EXLCZ)99317000000005538820100902d2009 uf 0engurcn|||||||||txtccrCountercyclical macro prudential policies in a supporting role to monetary policy /Papa N'Diaye1st ed.[Washington, D.C.] International Monetary Fundc20091 online resource (36 p.)IMF working paper ;WP/09/257Description based upon print version of record.1-4519-1818-6 Includes bibliographical references.Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Overview of the CCA; III. Model Overview; A. Aggregate Demand Equation; B. Inflation; C. Core Inflation-Phillips curve; D. Okun's Law Relationship; E. Labor Income; F. Exchange Rate; G. Monetary Policy Rule; H. Yield Curve and Term Structure; I. Spreads and Balance Sheets; J. Uncertainty; K. Debt Dynamics; L. Financial Regulations; M. Equity; N. The Supply Side; IV. Illustrative Model Simulations; V. Conclusion; References; FootnotesThis paper explores how prudential regulations can support monetary policy in reducing output fluctuations while maintaining financial stability. It uses a new framework that blends a standard model for monetary policy analysis with a contingent claims model of financial sector vulnerabilities. The results suggest that binding countercyclical prudential regulations can help reduce output fluctuations and lessen the risk of financial instability. More specifically, countercyclical rules such as countercyclical capital adequacy rules, can allow monetary authorities to achieve the same output and inflation objectives but with smaller adjustments in interest rates. The countercyclical rules can help stem swings in asset prices, lean against a financial accelerator process, and thereby help to lower risks of macroeconomic and financial instability. In economies with fixed exchange rates, where countercyclical monetary policy is not possible, prudential regulations can provide a useful mechanism for mitigating a run-up in asset prices and for promoting output stability.IMF working paper ;WP/09/257.Monetary policyAssets (Accounting)Monetary policy.Assets (Accounting)338.19234N'Diaye Papa M'B. P(Papa M'Bagnick Pate)1751529International Monetary Fund.MiAaPQMiAaPQMiAaPQBOOK9910827453703321Countercyclical macro prudential policies in a supporting role to monetary policy4187704UNINA