Leaning Against the Wind: Macroprudential Policy in Asia
By Longmei Zhang, Edda Zoli. Social Science Research Network, 2014
221 citations recorded by the source corpus.
In recent years, many countries have adopted macroprudential measures to safeguard financial stability, in particular to deal with the credit and asset price cycles driven by global capital flows. Using a newly constructed database on macroprudential instruments and capital flow measures in 13 Asian economies and 33 economies in other regions for the period 2000–2013, the paper formulates various macroprudential policy indices, aggregating sub-indices on key instruments. Asian economies appear to have made greater use of macroprudential tools, especially housing-related measures, than their counterparts in other regions. The effects of macroprudential policy are assessed through an event study, cross-country macro panel regressions, and bank-level micro panel regressions. The analysis suggests that housing-related macroprudential instruments-particularly loan-to-value ratio caps and housing tax measures—have helped curb housing price growth, credit growth, and bank leverage in Asia.
Subfields: Accounting, Finance
View Paper: https://www.semanticscholar.org/paper/07ffc5f8a84b2d44a8760180e14fb5337d290885
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Citations in the corpus
- The Use and Effectiveness of Macroprudential Policies: New Evidence (2015, unknown): “Zhang and Zoli (2014) review the use of key macroprudential instruments and capital flow measures in 13 Asian economies and 33 other economies since 2000 and study their effects.”
- How Effective are Macroprudential Policies? An Empirical Investigation (2017, background): “Several studies using panel data for different regions find that housing measures may reduce mortgage credit booms ( Zhang and Zoli, 2014; IMF, 2014 ).”