Template-type: ReDIF-Article 1.0
Author-Name: Ivan Khotulev
Author-Email: khotulevim@cbr.ru
Author-Workplace-Name: Bank of Russia
Author-Name: Konstantin Styrin
Author-Email: styrinka@cbr.ru
Author-Workplace-Name: Bank of Russia
Title: Optimal Monetary and Macroprudential Policies for Financial Stability in a Commodity-Exporting Economy
Abstract: We develop a model of analysing the optimal combination of macroprudential and monetary policies in a small open commodity-exporting economy. Unlike a closed economy, where monetary and macroprudential policies tend to be substitutes, in a small open economy the optimal policy mix depends on the specifics of shocks and economic structure. Monetary and macroprudential policies tend to complement each other when the degree of pass-through of credit spreads into marginal costs and prices are sufficiently high, or when a credit boom is caused by a commodity boom, a fraction of consumers lacks access to financial markets, and the government follows a fiscal policy rule. The two policies are substitutes when the complementarity between domestic and imported production inputs is sufficiently high.
Classification-JEL: E52, E58, G01, G28
Keywords: monetary policy, macroprudential policy, financial stability, commodity exporter, small open economy
Journal: Russian Journal of Money and Finance
Pages: 3-42
Volume: 79
Issue: 2
Year: 2020
Month: June
DOI: 10.31477/rjmf.202002.03
File-URL: https://rjmf.econs.online/upload/iblock/e79/Monetary%20Policy%20Commodity%20Exporting%20Economy.pdf
Handle: RePEc:bkr:journl:v:79:y:2020:i:2:p:3-42