What are the Effects of Macroprudential Policies on Macroeconomic Performance?

18 Pages Posted: 26 Sep 2017

See all articles by Codruta Boar

Codruta Boar

Bank for International Settlements (BIS) - Monetary and Economic Department

Leonardo Gambacorta

Bank for International Settlements (BIS); Centre for Economic Policy Research (CEPR)

Giovanni Lombardo

Bank for International Settlements (BIS)

Luiz A. Pereira da Silva

Bank for International Settlements (BIS)

Date Written: September 17, 2017

Abstract

Macroprudential policies are designed to make financial crises less likely or less severe. At the same time, they might also curb output growth by affecting credit supply and investment. Using data for a panel of 64 advanced and emerging market economies, this special feature investigates empirically the effects of macroprudential policies on long-run economic performance. We find that countries that more frequently use macroprudential tools, other things being equal, experience stronger and less volatile GDP growth. These effects are influenced by each economy's openness and financial development. Finally, we find that non-systematic macroprudential interventions tend to be detrimental to growth.

JEL Classification: G10, G21, O16, O40

Suggested Citation

Boar, Codruta and Gambacorta, Leonardo and Lombardo, Giovanni and Pereira da Silva, Luiz A., What are the Effects of Macroprudential Policies on Macroeconomic Performance? (September 17, 2017). BIS Quarterly Review September 2017, Available at SSRN: https://ssrn.com/abstract=3042014

Codruta Boar (Contact Author)

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Leonardo Gambacorta

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Giovanni Lombardo

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Luiz A. Pereira da Silva

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

HOME PAGE: http://www.bis.org/author/luiz_awazu_pereira_da_silva.htm

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