Macroprudential Policy and Aggregate Demand

descriptionPublicationkeyboard_double_arrow_right Article , Research , Preprint 01 Jan 2022 Portugal English Publisher:Elsevier BVJournal:SSRN Electronic Journal (eissn: 1556-5068,

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Authors: Teixeira, André; Venter, Zoe;

doi: 10.2139/ssrn.4046093

handle: 10400.14/38216 , 10400.14/42999

Macroprudential Policy and Aggregate Demand

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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.

Country

Portugal

Related Organizations

Universidade Católica Portuguesa
Portugal

Keywords

Difference-in-differences, Consumption, Aggregate demand, Macroprudential policy, Investment, Savings

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