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August 18, 2026
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Does “Lean Against the Wind” monetary policy improve welfare in a commodity exporter?

Journal of International Money and Finance. 2024. Vol. 141. Article 103012.
Peiris U., Shirobokov A., Tsomocos D.

Emerging Market Economies struggle to balance monetary policy with capital flow management and commodity price volatility. Our study employs a New-Keynesian model, using Russian data from 2001 to 2019, to examine ‘Lean Against the Wind’ (LAW) monetary policies. We show that under Lean Against the Wind (LAW) policies, households with borrowed funds experience improved welfare, while households that save are adversely affected. While LAW increases output and inflation volatility, it also presents mixed financial stability outcomes—lowering debt volatility but heightening that for household delinquencies. These findings highlight the complex effects of LAW in economies subject to varied shocks.

Research target: Economics and Management
Language: English
DOI
Keywords: financial stability emerging marketsmacroprudential policysmall open economyLean against the windCommodity exporter
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