BoE paper explores macroeconomic impact of macro-pru
Authors build DSGE model featuring “detailed banking sector” and sticky interest rates
New research published by the Bank of England explores the macroeconomic impact of macro-prudential policy, highlighting several aspects of the transmission mechanism.
In the staff working paper, Marc Hinterschweiger, Kunal Khairnar, Tolga Ozden and Tom Stratton build a dynamic stochastic general equilibrium model to study tools including sectoral capital requirements, loan-to-value limits and the countercyclical capital buffer.
The model features a “detailed banking sector”, the authors say
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