Cover IMF Working Papers
Capital Flows, Financial Intermediation and Macroprudential Policies
Author: Matteo Ghilardi and Mr. Shanaka J Peiris
Series:
IMF Working Papers
Volume/Issue:
Volume 2014: Issue 157
Language:
English
Publication Date:
21 Aug 2014
DOI:
https://doi.org/10.5089/9781498365659.001
ISBN:
9781498365659
ISSN:
1018-5941
Pages:
31
Keywords:
WP; capital regulation; Financial Frictions; Monetary Policy; asset price shock; bank capital shock; countercyclical capital rule; capital requirement; capital producer; Macroprudential policy; Credit; Capital adequacy requirements; Capital flows; Capital inflows; Asia and Pacific; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund