Macroprudential Policy: a Blessing or a Curse?

Monetary and Macroprudential Policy: The Multiplier Effects of Cooperation

“…Hence, the actual institutional framework in which the two policies are embedded does affect the outcome of the interplay between macroprudential and monetary policy. Such an interplay is generally studied by means of DSGE modelling, by augmenting a standard New Keynesian model with different financial frictions (Cozzi et al, 2021 is a recent example) or making use of full-fledged agentbased models (Popoyan et al, 2017;2020). However, most of the relevant results can be obtained in a simple BMW framework (Bofinger et al, 2007), which represents a static approximation of a more general New Keynesian DSGE model (Bofinger et al, 2004).…”