Monetary Policy and Macroprudential Policy: Different and Separate?

“Monetary Policy and Macroprudential Policy: Different and Separate?” revised March 2018,  Canadian Journal of Economics, forthcoming. Paper


The paper discusses how monetary and macroprudential policies can be distinguished, how appropriate goals for the two policies can be determined, whether the policies are best conducted separately or coordinately and by the same or different authorities, and how they can be coordinated when desired. The Swedish example of strong leaning against the wind followed by a policy turnaround is summarized, as well as what the costs and benefits of monetary policy leaning against the wind are.