The impact of macroprudential policies on industrial growth

Carlos Madeira

Journal of International Money and Finance, 2024, vol. 145, issue C

Abstract: This paper analyzes the causal impact of macroprudential policies on growth, using industry-level data for 89 countries for the period 1990 to 2021. The small industry size creates exogenous identification, avoiding reverse-causality. I find macroprudential tightening measures impact manufacturing growth negatively, but only for industries with high external finance dependence. This effect is stronger during banking crises, higher growth periods and for advanced economies. The effect is weaker during periods of high private credit growth. Prudential policies implemented before the pandemic mitigated the fall in growth. Growth effects on externally dependent industries are economically sizeable and can persist over three years.

Keywords: Macroprudential policy; Financial development; Growth; External finance dependence; Credit frictions (search for similar items in EconPapers)
JEL-codes: E44 G28 O10 O16 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: The impact of macroprudential policies on industrial growth (2024)
Working Paper: The impact of macroprudential policies on industrial growth (2023)
Working Paper: The impact of macroprudential policies on industrial growth (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:145:y:2024:i:c:s0261560624000937

DOI: 10.1016/j.jimonfin.2024.103106

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