Citation

Discussion Paper Details

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Title: Macroprudential Policies in a Global Perspective

Author(s): Olivier Jeanne

Publication Date: March 2014

Keyword(s): Capital Controls, Capital Flows, International Policy Coordination, International Reserves, Liquidity Trap and Macroprudential Policy

Programme Area(s): International Macroeconomics

Abstract: This paper analyzes the case for the international coordination of macroprudential policies in the context of a simple theoretical framework. Both domestic macroprudential policies and prudential capital controls have international spillovers through their impact on capital flows. The uncoordinated use of macroprudential policies may lead to a "capital war" that depresses global interest rates. International coordination of macroprudential policies is not warranted, however, unless there is unemployment in some countries. There is scope for Pareto-improving international policy coordination when one part of the world is in a liquidity trap while the rest of the world accumulates reserves for prudential reasons.

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Bibliographic Reference

Jeanne, O. 2014. 'Macroprudential Policies in a Global Perspective'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=9875