Towards Understanding Macrofinancial Impacts of Loanâ€ toâ€ Value Ratio Policy in New Zealand: A General Equilibrium Perspective
Lucy Greig and
Australian Economic Review, 2018, vol. 51, issue 1, 99-131
We use a dynamic stochastic general equilibrium model as a framework for thinking about the transmission mechanism of loanâ€ toâ€ value macroprudential policy. We analyse the key channels through which the caps on loanâ€ toâ€ value ratios work to limit the speed of asset and credit cycles. We further analyse the mechanisms through which the caps support financial system resilience during asset price downturns that are of sufficient magnitude to cause financial and macroeconomic instability.
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Persistent link: https://EconPapers.repec.org/RePEc:bla:ausecr:v:51:y:2018:i:1:p:99-131
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