Monetary Policy and Credit Cycles: A DSGE Analysis
type: Dataset
description: The recent fi nancial crisis revealed several flaws in both monetary and fi nancial regulation. Contrary to what was believed, price stability is not a suffi cient condition for financial stability. At the same time, micro-prudential regulation alone becomes insu fficient to ensure the financial stability objective. In this paper, we propose an ex-post analysis of what a central bank could have done to improve the reaction of the economy to the financial bubble. We study by means of a fi nancial accelerator DSGE model the dynamics of our economy when the central bank has, fi rst, only traditional objectives, and second, when an additional financial stability objective is added. Overall, results indicate that a more aggressive monetary policy would have had little success in improving the response of the economy to the financial bubble, as the actions of the central bank would have remained limited by the use of a single instrument, the interest rate.
issued: 2026-05-10T22:54:46.710814
language: en
modified: 2026-05-10T22:54:46.710819
contact point: Organization
  fn: CCSD
keyword: bank-capital-channel
keyword: canal-du-capital-bancaire
keyword: credit-cycles
keyword: cycle-de-cr-edit
keyword: financial-stability
keyword: infoeu-reposemanticspreprint
keyword: monetary-policy
keyword: politique-mon-etaire
keyword: preprints-working-papers-
keyword: shsecohumanities-and-social-scienceseconomics-and-finance
keyword: stabilit-e-financi-ere
landing page: https://shs.hal.science/halshs-00828074

Monetary Policy and Credit Cycles: A DSGE Analysis
type: Distribution
format: HTML
issued: 2026-05-10T22:54:46.717113
modified: 2026-05-10T22:54:46.698730
access URL: https://shs.hal.science/halshs-00828074

test_moissonnage_selune
type: Agent