Macro-prudential tools can boost long-run growth – BoE paper
Authors develop theoretical framework linking financial frictions to long-run growth
Macro-prudential policies can support long-run growth, according to a theoretical framework laid out in a Bank of England working paper.
Dario Bonciani, David Gauthier and Derrick Kanngiesser look to fill what they see as a gap in the literature. Previous research, they say, has not yet addressed the long-term benefits of macro-prudential policy in a dynamic stochastic general equilibrium model. In the paper, they develop a medium-scale model with financial frictions and endogenous growth.
The
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