01862cas a2200253 a 4500 AALejournalIMF014232 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484302873 1018-5941 BD-DhAAL BD-DhAAL Medina Guzman, Juan Pablo. Monetary and Macroprudential Policies to Manage Capital Flows / Juan Pablo Medina Guzman, Jorge Roldos. Washington, D.C. : International Monetary Fund, 2014. 1 online resource (44 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We study interactions between monetary and macroprudential policies in a model with nominal and financial frictions. The latter derive from a financial sector that provides credit and liquidity services that lead to a financial accelerator-cum-fire-sales amplification mechanism. In response to fluctuations in world interest rates, inflation targeting dominates standard Taylor rules, but leads to increased volatility in credit and asset prices. The use of a countercyclical macroprudential instrument in addition to the policy rate improves welfare and has important implications for the conduct of monetary policy. 'Leaning against the wind' or augmenting a standard Taylor rule with an argument on credit growth may not be an effective policy response. Mode of access: Internet Roldos, Jorge. IMF Working Papers; Working Paper ; No. 2014/030 Full text available on IMF http://elibrary.imf.org/view/journals/001/2014/030/001.2014.issue-030-en.xml IMF e-Library