Macroprudential Policies and Current Account Balance

Mehmet Ekinci

MPRA Paper from University Library of Munich, Germany

Abstract: Macroprudential policies have become essential tools for the policy makers in order to maintain financial stability. Effectiveness of these policies has been studied by a growing literature with an emphasis on the impact of the policies on target variables such as credit growth and asset price appreciations. In this paper, we investigate the impact of macroprudential policies on the current account balance considering the link between external imbalances and financial stability. Building on a standard empirical current account model, we show that usage of an additional macroprudential instrument is associated with an improvement in the current account balance. Moreover, our results indicate that positive impact of macroprudential policy measures on the current account balance is stronger in the deficit countries compared to the surplus countries.

Keywords: Global Imbalances; Current Account Balance; Macroprudential Policies and Panel Data. (search for similar items in EconPapers)
JEL-codes: C33 E58 F32 G18 G28 (search for similar items in EconPapers)
Date: 2020-04-05
New Economics Papers: this item is included in nep-acc, nep-cba and nep-mac
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Related works:
Journal Article: Macroprudential policies and current account balance (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:99445

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