Digging Deeper—Evidence on the Effects of Macroprudential Policies from a New Database

Zohair Alam, Adrian Alter, Jesse Eiseman, Gaston Gelos, Heedon Kang, Machiko Narita, Erlend Nier and Naixi Wang

Journal of Money, Credit and Banking, 2025, vol. 57, issue 5, 1135-1166

Abstract: This paper introduces a comprehensive database of macroprudential policies, which covers 134 countries from January 1990. Using a novel numerical indicator of the tightness of loan‐to‐value (LTV) regulations, we estimate the policy effects of incremental tightening in LTV limits, employing a propensity score–based method to address endogeneity concerns. The results point to economically significant and nonlinear effects on household credit, with a declining per‐unit impact for larger tightening measures. The analysis indicates that policy leakage effects could be a factor behind the nonlinear effects. We finally find that the side effects of macroprudential policies on consumption and output are relatively small.

Date: 2025
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https://doi.org/10.1111/jmcb.13130

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Working Paper: Digging Deeper--Evidence on the Effects of Macroprudential Policies from a New Database (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:57:y:2025:i:5:p:1135-1166

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