An analysis of monetary and macroprudential policies in a DSGE model with reserve requirements and mortgage lending

Michael Ben-Gad, Joseph Pearlman and Ivy Sabuga

Economic Modelling, 2022, vol. 116, issue C

Abstract: •Raising the reserve ratio leads to borrowers' welfare gains at the expense of savers.•Macroprudential policy stabilises the economy in response to a risk shock.•Macroprudential policy generates a stabilisation benefit to borrowers.•Macroprudential is more effective than monetary policy at stabilising against shocks.•Stabilisation works best when both monetary and macroprudential policy are used.

Keywords: Reserve requirements; Endogenous loan defaults; Welfare (search for similar items in EconPapers)
JEL-codes: E32 E44 E58 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Working Paper: An Analysis of Monetary and Macroprudential Policies in a DSGE Model with Reserve Requirements and Mortgage Lending (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:116:y:2022:i:c:s0264999322002127

DOI: 10.1016/j.econmod.2022.105966

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