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The interaction between macroprudential and monetary policies: The cases of Norway and Sweden

Cao, Jin ; Dinger, Valeriya ; Grodecka-Messi, Anna LU ; Juelsrud, Ragnar and Zhang, Xin (2021) In Review of International Economics 29(1). p.87-116
Abstract
To shed light on the interaction between macroprudential and monetary policies, we study the inward transmission of foreign monetary policy in conjunction with domestic macroprudential and monetary policies in Norway and Sweden. Using detailed bank‐level data, we show how Norwegian and Swedish banks’ lending reacts to monetary policy surprises arising abroad, controlling for the domestic macroprudential stance and the interaction between monetary and macroprudential policies. In both countries, domestic macroprudential policy helps mitigate the effects arising from foreign monetary surprises.
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author
; ; ; and
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
monetary policy, macroprudential policy, policy interactions, bank lending, inward transmission, international bank lending channel
in
Review of International Economics
volume
29
issue
1
pages
87 - 116
publisher
John Wiley & Sons Inc.
external identifiers
  • scopus:85091609669
ISSN
1467-9396
DOI
10.1111/roie.12507
language
English
LU publication?
yes
id
1b142a8e-4659-4282-ba2e-47945f79ed4e
date added to LUP
2020-10-12 14:57:47
date last changed
2022-10-25 15:45:55
@article{1b142a8e-4659-4282-ba2e-47945f79ed4e,
  abstract     = {{To shed light on the interaction between macroprudential and monetary policies, we study the inward transmission of foreign monetary policy in conjunction with domestic macroprudential and monetary policies in Norway and Sweden. Using detailed bank‐level data, we show how Norwegian and Swedish banks’ lending reacts to monetary policy surprises arising abroad, controlling for the domestic macroprudential stance and the interaction between monetary and macroprudential policies. In both countries, domestic macroprudential policy helps mitigate the effects arising from foreign monetary surprises.}},
  author       = {{Cao, Jin and Dinger, Valeriya and Grodecka-Messi, Anna and Juelsrud, Ragnar and Zhang, Xin}},
  issn         = {{1467-9396}},
  keywords     = {{monetary policy; macroprudential policy; policy interactions; bank lending; inward transmission; international bank lending channel}},
  language     = {{eng}},
  number       = {{1}},
  pages        = {{87--116}},
  publisher    = {{John Wiley & Sons Inc.}},
  series       = {{Review of International Economics}},
  title        = {{The interaction between macroprudential and monetary policies: The cases of Norway and Sweden}},
  url          = {{http://dx.doi.org/10.1111/roie.12507}},
  doi          = {{10.1111/roie.12507}},
  volume       = {{29}},
  year         = {{2021}},
}