TY  - GEN
AU  - Carrillo, Julio A.
AU  - Mendoza, Enrique G.
AU  - Nuguer, Victoria
AU  - Roldán-Peña, Jessica
TI  - Research Insights: Should Financial Stability Considerations Be Included in Monetary Policy Rules or Should They Be Addressed with Separate Financial Policy Rules?
PY  - 2020
Y1  - 2020/10/08
DO  - 10.18235/0002728
AB  - Countries should have two different rules: a monetary policy rule for inefficiency in adjusting prices, and a financial policy rule for inefficiencies originating in financial markets. A two-rule regime entails lower welfare costs than either a Taylor rule, which reacts to inflation, or a Taylor rule augmented with financial considerations. When two rules are used, the Nash equilibrium is better than a Taylor rule or an augmented Taylor rule, but worse than a cooperative equilibrium.
UR  - https://doi.org/10.18235/0002728
ER  -