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.
If the inline PDF is not rendering correctly, you can download the PDF file here.
1. Alpanda S. Cateau G. & Meh C. (2014). A Policy Model to Analyze Macroprudential Regulations and Monetary Policy. BIS Working Papers No 461.
2. Angelini P. Clerc L. Curdia V. Gambarcorta L. Gerali A. Locarno A. Motto R. Roeger W. Van den Heuvel S. & Vlček J. (2015). BASEL III: Long-term impact on economic performance and fluctuations. The Manchester School 83: 217-251.
3. Angelini P. Neri S. & Panetta F. (2011). Monetary and Macroprudential Policies. Bank of Italy Economic working papers No. 801.
4. Arregui N. Benes J. Krznar I. & Mitra S. S. (2013). Evaluationg the Net Benefits of Macroprudential Policy: A Cookbook. IMF Working Paper 13/167.
5. Arellano M. and O. Bover. 1995. “Another Look at the Instrumental Variable Estimation of Error-Components Models.” Journal of Econometrics 68(1): 29–51.
6. Aydinbas Y. C. Hardt C. Rzayev J. Soker M. Taylor T. Walker D. & Zhao P. (2015). Frameworks for Implementing Macroprudetial Policy. New York: The Federal Reserve Bank of New York.
7. Bailey D. & Katz J.N. 2011. Implementing Panel-Corrected Standard Errors in R: The PCSE Package. Journal of Statistical Software Code Snippets 42(1) 1–11.
8. Bailliu J. Meh C. & Zhang Y. (2015). Macroprudential Rules and Monetary Policy when Financial Frictions Matter. Economic Modelling 50 148-161.
9. Behn M. Gross M. & Peltonen T. (2016). Assessing the cost and benefits on capital-based macroprudential policy. ECB Working Paper No. 1935.
10. BIS. (2011). The transmission channels between the financial and real sectors: a critical survey of the literature. Basel Committee on Banking Supervision.
11. Boar C. Gambacorta L. Lombardo G. & Pereira da Silva L. (2017). What are the effects of macroprudential policies on macroeconomic performance. BIS Quarterly Review September 2017.
12. Carpantier J. Olivera J. & Van Kerm P. (2018). Macroprudenital policy and Household Wealth Inequality. Journal of International Money and Finance 85 262-277.
13. Cerutti E. Claessens S. & Laeven L. (2017). The use and effectiveness of macroprudential policies: New evidence. Journal of Financial Stability 28 203-224.
14. Fender I. & Lewrick U. (2016). Adding it all up: the macroeconomic impact of Basel III and outstanding reform issues. BIS Working Paper No. 591.
15. Gros D. & Alcidi C. (2010). The Impact of the Financial Crisis on the Real Economy. Intereconomics. 45(1) 4-20.
16. Kannan P. Rabanal P. & Scott A. (2012). Monetary and Macroprudential Policy Rules with House Price Booms. The B.E. Journal of Macroeconomics 12(1) Art. 16.
17. Kawata H. Kurachi Y. Nakamura K. & Teranishi Y. (2013). Impact of Macroprudential Policy Measures on Economic Dynamics: Simulation Using a Financial Macro-econometric Model. Bank of Japan Working Paper Series 13-E-3
18. Kim S. & Mehrotra A. (2017). Effects of monetary and macroprudential policies-evidence from inflation targeting economies in Asia-Pacific region and potential implications for China. BOFIT Discussion Papers No. 4/2017.
19. Ollivaud P. & Turner D. (2014). The effect of the global financial crisis on OECD potential output. OECD Journal: Economic Studies 41-60.
20. Roodman D. 2006. “How to Do xtabond2: An introduction to “Difference” and “System” GMM in Stata.” Center for Global Development Working Paper No. 103.
21. Sanchez A. & Rohn O. (2016). How do policies influence GDP tail risks? OECD Economics Department Working Paper No. 1339.
22. Slovik P. & Cournede B. (2011). Macroeconomic impact of Basel III. OECD Working Papers No. 844.