Monetary and macroprudential policies with direct and indirect financing: Implications for macroeconomic stability

Jan Bruch, Franz Seitz and Uwe Vollmer

No 91, Weidener Diskussionspapiere from University of Applied Sciences Amberg-Weiden (OTH)

Abstract: We assess the impact of macroprudential measures on macroeconomic stability using a DSGE model in which firms can access both direct and indirect financing. The model is calibrated with data from the euro area. We compare two different macroprudential rules (time-invariant and counter-cyclical) in the presence of a monetary policy shock and a macroprudential policy shock. We find that the macroprudential rule has little impact on the adjustment dynamics to a monetary and macroprudential shock. Direct financing increases the impact of monetary shocks on the volatility of financial variables but not on output and inflation. Simultaneous monetary policy and macroprudential policy shocks do not alter the reaction of inflation compared to a monetary policy shock but cause permanent output losses.

Keywords: Monetary Policy; Macruprudential Policy; Inflation; Business Cycle; DSGE (search for similar items in EconPapers)
JEL-codes: E12 E31 E32 E58 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-cba, nep-dge, nep-fdg and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/300658/1/1896975631.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:hawdps:300658

Access Statistics for this paper

More papers in Weidener Diskussionspapiere from University of Applied Sciences Amberg-Weiden (OTH)
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().