Scandinavian Working Papers in Economics
Working Paper Series,
Sveriges Riksbank (Central Bank of Sweden)
No 137: Financial Instability and Monetary Policy: The Swedish Evidence
U. Michael Bergman () and Jan Hansen ()
Additional contact information
U. Michael Bergman: Department of Economics, Lund University, Postal: P.O. Box 7082, SE–22007 Lund, Sweden
Jan Hansen: Research Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
Abstract: This paper examines the relationship between financial instability and monetary policy within the Swedish economy. Based on a standard VAR model of monetary policy extended to include measures of financial instability and credit expansions, we examine the interaction between monetary policy and financial stability. We find that both higher interest rates, higher prices and lending expansions contribute to financial instability. As the effects from price shocks are strong and persistent compared to other shocks, our conclusion is that we cannot reject that price stability and financial stability are mutually consistent goals for monetary policy.
Keywords: Financial instability; monetary policy; VAR model; structural shocks
41 pages, June 1, 2002
Full text files
wp_137.pdf
Questions (including download problems) about the papers in this series should be directed to Lena Löfgren ()
Report other problems with accessing this service to Sune Karlsson ().
This page generated on 2024-02-05 17:13:28.