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Differential Effects of Macroprudential Policy
Author:
Nina Biljanovska
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Sophia Chen
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Series:
IMF Working Papers
Volume/Issue:
Volume 2023: Issue 043
Language:
English
Publication Date:
24 Feb 2023
DOI:
https://doi.org/10.5089/9798400235719.001
ISBN:
9798400235719
ISSN:
1018-5941
Pages:
45
Keywords:
Household borrowing; macroprudential policy; income distribution; differential effect; higher-income household; capital requirements; household income; capital requirement; Income; Mortgages; Loans; Macroprudential policy instruments; Global
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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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We explore the differential effects of lender-based macroprudential policies on new mortgage borrowing for households of different income using a comprehensive dataset that links macroprudential policy actions with household survey data for European Union countries. The main results suggest that higher-income households on average experience a larger reduction in mortgage loan size than lower-income households when regulation targeting total lenders’ assets tightens. In contrast, lower-income households on average experience a larger reduction in mortgage loan size than higher-income households when regulation targeting lenders’ capital requirements tightens. We also provide evidence of the different channels through which the differential effects operate.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund