The need for macroprudential monetary policy is created by differentiation as credit grows: There can be a bubble in one area, and a starvation of credit in another area. If policy makers want to slow down credit where bubbles are emerging, and redirect credit to other areas, macroprudential policies can shift credit in that way. For instance, a classic countercyclical macroprudential policy is to make it easier to buy a house in a housing bust (say, by forcing credit standards lower or allowing lower down payments) or to make it harder to buy a house in a housing bubble (by doing the
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