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Macroprudential Policy and Aggregate Demand

Author

Listed:
  • Andre Teixeira

    (Universidade de Lisboa)

  • Zoe Venter

    (Universidade Catolica Portuguesa)

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.

Suggested Citation

  • Andre Teixeira & Zoe Venter, 2022. "Macroprudential Policy and Aggregate Demand," Working Papers 2022.04, International Network for Economic Research - INFER.
    • Handle: RePEc:inf:wpaper:2022.04
    as

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    File URL: https://infer-research.eu/wp-content/uploads/2022/06/WP2022.04.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    macroprudential policy; aggregate demand; difference-in-difference approach;
    All these keywords.

    JEL classification:

    • E - Macroeconomics and Monetary Economics

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