"The role of monetary policy and macroprudential policy" (presentation)

The objectives, instruments and reference rules for monetary and macroprudential policy and the IMFS research in those areas were the topic of a joint presentation by Prof. Volker Wieland, Matyás Farkas, Philipp Lieberknecht and Prof. Tobias Tröger at a conference of the Foundation of Monetary and Financial Stability (Stiftung Geld und Währung) on the ongoing low-interest rate phase and the challenges for the financial markets.

Safeguarding price stability is the mandate of monetary policy whereas monetary policy aims at the stability of the financial system as a whole. Of course, monetary policy influences financial stability and the macroprudential policy has an impact on the entire economy.

In order to compare the effect of various instruments and compare macroeconomic models, IMFS researchers have established on online database, the Macroeconomic Model Data Base (MMB), with more than 110 models. With the help of the software that is available on the website www.macromodelbase.com researchers are able to analyze and compare monetary as well as fiscal and macroprudential policy and derive reference rules for monetary and macroprudential policy.

The interaction between unconventional monetary policy and macroeconomic risk hasn't been deeply examined so far. By applying a new methoed, an IMFS researcher has analyzed the long-term effects of the ECB bond purchases on inflation expectations.

The full summary of the presentation as well as the slides are only available in German (PDF, 730 KB).

For more details and conference photos go to the website of the Federal Ministry of Finance

Summary of the conference in the Monthly Bulletin December of the Federal Ministry of Finance