What are the Effects of Macroprudential Policies on Macroeconomic Performance?
18 Pages Posted: 26 Sep 2017
Date Written: September 17, 2017
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: Suggested Citation