Macroeconomic and financial stability: challenges for monetary policy
On September 2008, Lehman Brothers filed for bankruptcy and the world became aware that the financial crisis that had been unfolding for months was far more serious than expected. Months later, it became clear that the financial crisis of 2008-2009 was the worst economic downturn since the Great Depression of the 1930s. The crisis not only brought the global financial system to the brink of disaster, but also shook the existing consensus regarding the appropriate conduct of monetary policy and macroeconomic stabilization. This volume provides a comprehensive study on the interaction between economic policy and macroeconomic and financial stability. It collects thirteen contributions by leading experts in the field of macroeconomics discussing the lessons left by the financial crisis for the conduct of monetary policy, the role of monetary policy in the buildup of a financial crisis, the role of monetary and macro-prudential policies in preventing a financial crisis and the policies that can aid the economy in the path to recovery from a financial crisis.Macroeconomic and financial stability: an overview / Sofi?a Bauducco, Lawrence Christiano, Claudio and Raddatz -- Central banking after the crisis / Frederic S. Mishkin -- Does some expansionary monetary policy cause asset price booms? some historical and empirical evidence / Michael D. Bordo and John Landon-Lane -- Private information in the mortgage market: evidence and a theory of crises / Robert Shimer -- Trade with asymmetric information / Robert E. Hall -- The leverage cycle, default, and foreclosure / John Geanakoplos -- Leverage restrictions in a business cycle model / Lawrence Christiano and Daisuke Ikeda -- Leverage restrictions in a business cycle model: a comment / Saki Bigio -- Macro-prudential policy and the conduct of monetary policy / Denis Beau, Christophe Cahn, Laurent Clerc, and Benoi?t Mojon -- Monetary policy and macro-prudential regulation: the risk-sharing paradigm / Atif Mian -- Jobless recoveries during financial crises: is inflation the way out? / Guillermo Calvo, Fabrizio Coricelli, and Pablo Ottonello -- International aspects of the zero lower bound constraint / Michael B. Devereux -- Monetary policy at the zero lower bound: the Chilean experience / Luis F. Ce?spedes, Javier Garci?a-Cicco, and Diego Saravia -- Credit stabilization through public banks: the case of Banco Estado / Luis Felipe Lagos and Mati?as Tapia.