The study investigates the impact of macroprudential and monetary policy shocks on financial and macroeconomic conditions, emphasising their complementary roles in achieving financial stability across 11 OECD economies from 2000 Q1 to 2018 Q4. Using a vector autoregressive (VAR) methodology within a dynamic data panel model, the analysis reveals that contractionary monetary policy shocks reduce financial variables but increase price levels, a phenomenon termed the “Price Puzzle”. Tightening macroprudential policy is found to negatively affect credit growth and economic output, highlighting its role in moderating financial excesses but potentially dampening economic activity. Effective coordination between macroprudential and monetary policies is essential to minimise political conflicts and enhance financial system stability at both macroeconomic and financial levels.

Transparent macroprudential policy promotes economic and financial stability by maintaining price stability and enhancing the resilience of financial systems. This study evaluates the impact of macroprudential transparency on inflation levels and expectations using data from 65 economies during the period 2000–2015. It employs panel data methodology and the generalised method of moments approach. The research findings reveal that macroprudential transparency is associated with lower inflation rates and inflation expectations in developing economies and emerging markets. Additionally, the efficiency of prudential transparency is confirmed for countries that do not adopt inflation targeting.