Capital Flows, Financial Intermediation and Macroprudential Policies

 
Author/Editor: Matteo Ghilardi ; Shanaka J. Peiris
 
Publication Date: August 21, 2014
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: This paper develops an open-economy DSGE model with an optimizing banking sector to assess the role of capital flows, macro-financial linkages, and macroprudential policies in emerging Asia. The key result is that macro-prudential measures can usefully complement monetary policy. Countercyclical macroprudential polices can help reduce macroeconomic volatility and enhance welfare. The results also demonstrate the importance of capital flows and financial stability for business cycle fluctuations as well as the role of supply side financial accelerator effects in the amplification and propagation of shocks.
 
Series: Working Paper No. 14/157
Subject(s): Capital flows | Asia | Emerging markets | Business cycles | Macroprudential policies and financial stability | Financial intermediation | Monetary policy | Banking sector | Open economies | General equilibrium models

 
English
Publication Date: August 21, 2014
ISBN/ISSN: 9781498365659/1018-5941 Format: Paper
Stock No: WPIEA2014157 Pages: 31
Price:
US$18.00
 
 
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