Evaluating the Net Benefits of Macroprudential Policy: A Cookbook
Electronic Access:
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Summary:
The paper proposes a simple, new, analytical framework for assessing the cost and benefits of macroprudential policies. It proposes a measure of net benefits in terms of parameters that can be estimated: the probability of crisis, the loss in output given crisis, policy effectiveness in bringing down both the probability and damage during crisis, and the output-cost of a policy decision. It discusses three types of policy leakages and identifies instruments that could best minimize the leakages. Some rules of thumb for policymakers are provided.
Series:
Working Paper No. 2013/167
Subject:
Banking Credit Financial crises Financial institutions Financial sector policy and analysis Housing prices Loans Macroprudential policy Money Prices
English
Publication Date:
July 17, 2013
ISBN/ISSN:
9781484335727/1018-5941
Stock No:
WPIEA2013167
Pages:
73
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