A new book argues “middle-income” central banks ought to set monetary and macro-prudential policy in tandem, recognising the importance of financial factors in driving outcomes in the real economy.

Bank for International Settlements deputy general manager Luiz Pereira da Silva and the University of Manchester’s Pierre-Richard Agénor highlight the difficulty central banks face in managing short-term fluctuations in the real economy alongside the longer-term boom and bust cycles that play out in