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Financial cycles, credit bubbles and stabilization policies
Gespeichert in:
| Personen und Körperschaften: | , |
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| Titel: | Financial cycles, credit bubbles and stabilization policies/ Luisa Corrado, Tobias Schuler |
| Format: | E-Book |
| Sprache: | Englisch |
| veröffentlicht: |
Frankfurt am Main, Germany
European Central Bank
[2019]
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| Gesamtaufnahme: |
Europäische Zentralbank: Working paper series ; no 2336 (December 2019)
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| Quelle: | Verbunddaten SWB Lizenzfreie Online-Ressourcen |
| Zusammenfassung: | This paper analyzes the effects of several policy instruments for mitigating financial bubbles generated in the banking sector. We augment a New Keynesian macroeconomic framework by endogenizing boundedly-rational expectations on asset values of loan portfolios, allow for interbank trading and show how a credit bubble can develop from a financial innovation. We then evaluate the efficacy of several policy instruments in counteracting financial bubbles. We find that an endogenous capital requirement reduces the impact of a financial bubble significantly while central bank intervention ("leaning against the wind") proves to be less effective. A welfare analysis ranks the policy reaction through an endogenous capital requirement highest. We therefore provide a rationale for the use of countercyclical capital buffers. |
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| Umfang: | 1 Online-Ressource (circa 44 Seiten); Illustrationen |
| ISBN: |
9789289939058
9289939052 |
| DOI: | 10.2866/494650 |