Macroprudential Policy and Aggregate Demand

Andre Teixeira () and Zoe Venter
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Andre Teixeira: Universidade de Lisboa
Zoe Venter: Universidade Catolica Portuguesa

No 2022.04, Working Papers from International Network for Economic Research - INFER

Abstract: This paper assesses the impact of macroprudential policy (MaPP) on aggregate demand in the EU between 2000-2019. Using a difference-in-differences approach, we find that MaPP reduces household consumption and increases firm investment. These effects are relatively mild in the short run but become more pronounced in the long run. Our findings point to a weaker macroeconomic impact than suggested in previous studies.

Keywords: macroprudential policy; aggregate demand; difference-in-difference approach (search for similar items in EconPapers)
JEL-codes: E (search for similar items in EconPapers)
Pages: 42 pages
Date: 2022
New Economics Papers: this item is included in nep-cba, nep-dem, nep-fdg and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:inf:wpaper:2022.04

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