Electoral Cycles in Macroprudential Regulation

Karsten Müller
Authors registered in the RePEc Author Service: Karsten Müller

American Economic Journal: Economic Policy, 2023, vol. 15, issue 4, 295-322

Abstract: Do politics matter for macroprudential policies? I show that changes in macroprudential regulation exhibit a predictable electoral cycle in the run-up to 221 elections across 58 countries from 2000 through 2014. Policies restricting mortgages and consumer credit are systematically looser before elections, particularly during economic expansions. Consistent with theories of opportunistic political cycles, this pattern is stronger when election outcomes are uncertain, regulators are closely tied to politicians, and institutions are poor. These results suggest that political pressures may limit the ability of regulators to "lean against the wind."

JEL-codes: D72 E32 G01 G21 G28 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/pol.20200626 (application/pdf)
https://doi.org/10.3886/E163121V1 (text/html)
https://www.aeaweb.org/doi/10.1257/pol.20200626.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/pol.20200626.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Electoral cycles in macroprudential regulation (2019)
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:aea:aejpol:v:15:y:2023:i:4:p:295-322

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/pol.20200626

Access Statistics for this article

American Economic Journal: Economic Policy is currently edited by Matthew Shapiro

More articles in American Economic Journal: Economic Policy from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().