Financial Frictions and Macroprudential Policy

Michal Brzoza-Brzezina

International Journal of Central Banking, 2014, vol. 10, issue 2, 249-261

Abstract: Incorporating financial intermediaries, with their ability to generate shocks and frictions, into macroeconomic models has recently gained substantial attention of the profession. In this commentary I ask whether the models we generated are ripe to provide valuable, quantitative advice to policymakers, especially those interested in implementing and conducting macroprudential policy. I concentrate on three features of standard DSGE models that, in my view, still make them hard to digest for policymakers: goals of macroprudential policy, assumed terms of lending, and spillovers.

JEL-codes: E44 E51 E58 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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