Taming macroeconomic instability: Monetary and macro prudential policy interactions in an agent-based model

@inproceedings{Popoyan2015TamingMI,
  title={Taming macroeconomic instability: Monetary and macro prudential policy interactions in an agent-based model},
  author={Lilit Popoyan and Mauro Napoletano and Andrea Roventini},
  year={2015}
}
We develop an agent-based model to study the macroeconomic impact of alternative macro-prudential regulations and their possible interactions with different monetary policy rules. The aim is to shed light on the most appropriate policy mix to achieve the resilience of the banking sector and foster macroeconomic stability. Simulation results show that a triple-mandate Taylor rule, focused on output gap, inflation and credit growth, and a Basel III prudential regulation is the best policy mix to… CONTINUE READING

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