This opens up the opportunity for policy decisions in both spheres to complement each another, but it also harbours the danger of them counteracting each other or even cancelling each other out.
There is no single answer to the question of how necessary or advantageous a coordination of policy areas would be.8 Recent research has provided some initial clues and corroborates the view that the inflation rate can be stabilised quite well if macroprudential policy has its own tools and works alongside monetary policy.9 However, harmful effects with respect to inflation rate volatility can arise if monetary policymakers ignore the impact of macroprudential tools on the financial markets.10 If central banks take decisions regarding both macroprudential and monetary policy tools, additional fluctuations in the inflation rate compared with the monetary policy status quo can be virtually ruled out, and such fluctuations could even be reduced overall.11 These preliminary results should be interpreted with caution.