Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/223556
Authors: 
Schularick, Moritz
ter Steege, Lucas
Ward, Felix
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper 8484
Abstract: 
Can central banks defuse rising stability risks in financial booms by leaning against the wind with higher interest rates? This paper studies the state-dependent effects of monetary policy on financial stability. Based on the near-universe of advanced economy financial cycles since the 19th century, we show that discretionary leaning against the wind policies during credit and asset price booms are more likely to trigger crises than prevent them.
Subjects: 
financial crises
instrumental variable
open economy trilemma
local projections
JEL: 
E44
E50
G01
G15
N10
Document Type: 
Working Paper

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