Monetary Policy

• Monetary Policy, Private Debt and Financial Stability Risks

  Staff Working Paper 2016-59 Gregory Bauer, Eleonora Granziera

  Can monetary policy be used to promote financial stability? We answer this question by estimating the impact of a monetary policy shock on private-sector leverage and the likelihood of a financial crisis. Impulse responses obtained from a panel VAR model of 18 advanced countries suggest that the debt-to-GDP ratio rises in the short run following an unexpected tightening in monetary policy.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Credit and credit aggregates, Financial stability, Monetary Policy, Transmission of monetary policy JEL Code(s): C, C2, C21, C23, E, E5, E52, E58

• The Paul Storer Memorial Lecture—Cross-Border Trade Integration and Monetary Policy

  Staff Discussion Paper 2016-20 Stephen S. Poloz

  In this paper we explore the nexus between cross-border trade integration and monetary policy. We first review the evidence that trade liberalization has increased the degree of integration in North America and conclude that, while robust structural inferences remain elusive, there is sufficient supporting evidence for central banks to treat the issue seriously.

  Content Type(s): Staff Research, Staff Discussion Papers Topic(s): Economic models, Monetary Policy, Trade Integration JEL Code(s): E, E3, E37, E5, F, F1, F4, F41, F6