The Role of Monetary and Macroprudential Policy Instruments on Macroeconomic Stability in Southeast Asian Countries

DOI

10.2991/aebmr.k.211117.001How to use a DOI?

Keywords

Global financial crisis; macroeconomic stability; macroprudential policy; monetary policy; new triffin dilemma

Abstract

The impact and trauma of global financial crisis overshadowed the post-crisis economic recovery in the last two decades. Monetary and macroprudential policies are the two most popular and general policies to maintain macroeconomic stability. Covid-19 has become a storm in the economy, paralyzing the economic conjuncture and not promising positive economic growth. Two steps of economic recovery can be used as an alternative interpretation of economic recovery due to the financial crisis, namely point of view of Smets and New Triffin Dilemma. The estimation of Panel Ordinary Least Square (POLS) in 5 ASEAN countries shows that monetary policy plays a more dominant role in shaping macroeconomic stability. The variables of trade and foreign capital flows which are part of the New Triffin Dilemma, namely FDI, have no significant effect on macroeconomic stability. Meanwhile, the exchange rate and inflation rate have a significant impact on the formation of macroeconomic stability. The overall results of this study conclude that the Smets point of view that separates the roles of monetary and macroprudential policy on macroeconomic stability is considered better in supporting the realization of macroeconomic stability. At the same time, the New Triffin Dilemma can be role as a supporting policy.

Copyright

© 2021 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Eka Febrianti Utami
PY  - 2021
DA  - 2021/11/30
TI  - The Role of Monetary and Macroprudential Policy Instruments on Macroeconomic Stability in Southeast Asian Countries
BT  - Proceedings of the  International Conference on Management, Business, and Technology (ICOMBEST 2021)
PB  - Atlantis Press
SP  - 1
EP  - 8
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.211117.001
DO  - 10.2991/aebmr.k.211117.001
ID  - Utami2021
ER  -