Macroprudential Policies and Economic Growth

Alin Marius Andries 1  and Florentina Melnic 2
  • 1 Centre for Research in Finance, “Alexandru Ioan Cuza” University of Iasi, Romania
  • 2 Centre for Research in Finance, “Alexandru Ioan Cuza” University of Iasi, Romania

Abstract

In this paper we assess the effectiveness of macroprudential policies in ensuring a sustainable contribution of the financial sector to economic growth. Our results sustain that macroprudential policies have beneficial effects on economic growth, expressed by the GDP per capita growth rate. Macroprudential policies, adopted to strengthen the resilience of the financial system and decrease the buildup of systemic risks, contribute to the economic growth by assuring a stable financial system, and, therefore, a healthier financial-macro relationship. Macroprudential policies that target financial institutions have greater impact on real economy compared with borrower-related macroprudential policies.

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