Macroeconomic policy interaction: State dependency and implications for financial stability in UK: A systemic review

The association between economic and financial stabilities and influence of macroeconomic policies on the financial sector creates scope of active policy role in financial stability. As a contribution to the existing body of knowledge, this study has analysed the implications of macroeconomic policy...

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Autores principales:	Muhammad Ali Nasir, Junjie Wu, Milton Yago, Alaa M. Soliman
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2016
Materias:	macroeconomic policy interaction/coordination symmetry of financial markets responses financial stability bayesian estimation jeffrey–lindley’s paradox institutional design Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/02bb5dd6862b412f9cf9bac258cae154
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spelling	oai:doaj.org-article:02bb5dd6862b412f9cf9bac258cae1542021-12-02T14:35:45ZMacroeconomic policy interaction: State dependency and implications for financial stability in UK: A systemic review2331-197510.1080/23311975.2016.1154283https://doaj.org/article/02bb5dd6862b412f9cf9bac258cae1542016-12-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2016.1154283https://doaj.org/toc/2331-1975The association between economic and financial stabilities and influence of macroeconomic policies on the financial sector creates scope of active policy role in financial stability. As a contribution to the existing body of knowledge, this study has analysed the implications of macroeconomic policy interaction/coordination for financial stability, proxied by financial assets, i.e. equity and bonds price oscillation. The critical review and analysis of the existing literature on the subject suggests that there is also ample evidence of interdependence between monetary and fiscal policies and this interrelation necessitates coordination between them for the sake of financial stability. There is also a case for analysing the symmetry of financial markets responses to macroeconomic policy interaction. On methodological and empirical grounds, it is vital to test the robustness of policy recommendations to overcome the limitation of a single empirical approach (Jeffrey–Lindley’s paradox). Hence, the Frequentist and Bayesian approaches should be used in commentary manner. The policy interaction and optimal policy combination should also be analysed in the context of institutional design and major financial events to gain insight into the implications of policy interaction in the periods of stable economic and financial environments as well as period of financial and economic distress.Muhammad Ali NasirJunjie WuMilton YagoAlaa M. SolimanTaylor & Francis Grouparticlemacroeconomic policy interaction/coordinationsymmetry of financial markets responsesfinancial stabilitybayesian estimationjeffrey–lindley’s paradoxinstitutional designBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 3, Iss 1 (2016)
institution	DOAJ
collection	DOAJ
language	EN
topic	macroeconomic policy interaction/coordination symmetry of financial markets responses financial stability bayesian estimation jeffrey–lindley’s paradox institutional design Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	macroeconomic policy interaction/coordination symmetry of financial markets responses financial stability bayesian estimation jeffrey–lindley’s paradox institutional design Business HF5001-6182 Management. Industrial management HD28-70 Muhammad Ali Nasir Junjie Wu Milton Yago Alaa M. Soliman Macroeconomic policy interaction: State dependency and implications for financial stability in UK: A systemic review
description	The association between economic and financial stabilities and influence of macroeconomic policies on the financial sector creates scope of active policy role in financial stability. As a contribution to the existing body of knowledge, this study has analysed the implications of macroeconomic policy interaction/coordination for financial stability, proxied by financial assets, i.e. equity and bonds price oscillation. The critical review and analysis of the existing literature on the subject suggests that there is also ample evidence of interdependence between monetary and fiscal policies and this interrelation necessitates coordination between them for the sake of financial stability. There is also a case for analysing the symmetry of financial markets responses to macroeconomic policy interaction. On methodological and empirical grounds, it is vital to test the robustness of policy recommendations to overcome the limitation of a single empirical approach (Jeffrey–Lindley’s paradox). Hence, the Frequentist and Bayesian approaches should be used in commentary manner. The policy interaction and optimal policy combination should also be analysed in the context of institutional design and major financial events to gain insight into the implications of policy interaction in the periods of stable economic and financial environments as well as period of financial and economic distress.
format	article
author	Muhammad Ali Nasir Junjie Wu Milton Yago Alaa M. Soliman
author_facet	Muhammad Ali Nasir Junjie Wu Milton Yago Alaa M. Soliman
author_sort	Muhammad Ali Nasir
title	Macroeconomic policy interaction: State dependency and implications for financial stability in UK: A systemic review
title_short	Macroeconomic policy interaction: State dependency and implications for financial stability in UK: A systemic review
title_full	Macroeconomic policy interaction: State dependency and implications for financial stability in UK: A systemic review
title_fullStr	Macroeconomic policy interaction: State dependency and implications for financial stability in UK: A systemic review
title_full_unstemmed	Macroeconomic policy interaction: State dependency and implications for financial stability in UK: A systemic review
title_sort	macroeconomic policy interaction: state dependency and implications for financial stability in uk: a systemic review
publisher	Taylor & Francis Group
publishDate	2016
url	https://doaj.org/article/02bb5dd6862b412f9cf9bac258cae154
work_keys_str_mv	AT muhammadalinasir macroeconomicpolicyinteractionstatedependencyandimplicationsforfinancialstabilityinukasystemicreview AT junjiewu macroeconomicpolicyinteractionstatedependencyandimplicationsforfinancialstabilityinukasystemicreview AT miltonyago macroeconomicpolicyinteractionstatedependencyandimplicationsforfinancialstabilityinukasystemicreview AT alaamsoliman macroeconomicpolicyinteractionstatedependencyandimplicationsforfinancialstabilityinukasystemicreview
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Macroeconomic policy interaction: State dependency and implications for financial stability in UK: A systemic review

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