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Financial Stability and Interest-Rate Policy: A Quantitative Assessment of Costs and Benefits
Author:
Mr. Andrea Pescatori
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and
Stefan Laseen
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Series:
IMF Working Papers
Volume/Issue:
Volume 2016: Issue 073
Language:
English
Publication Date:
21 Mar 2016
DOI:
https://doi.org/10.5089/9781475522679.001
ISBN:
9781475522679
ISSN:
1018-5941
Pages:
29
Keywords:
WP; financial crisis; interest rate; Monetary Policy; Endogenous Financial Risk; Bayesian VAR; Non-Linear Dynamics; Policy Evaluation; crisis probability; credit growth; monetary policy shock; crisis inflation; credit variable; Credit; Central bank policy rate; Financial sector stability; Inflation; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Should monetary policy use its short-term policy rate to stabilize the growth in household credit and housing prices with the aim of promoting financial stability? We ask this question for the case of Canada. We find that to a first approximation, the answer is no— especially when the economy is slowing down.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2016: Issue 073