IDEAS home Printed from https://ideas.repec.org/a/agr/journl/v3(628)y2021i3(628)p57-64.html
   My bibliography  Save this article

Evaluation of the methodological relationship between real business cycle model and macroprudential policy

Author

Listed:
  • Ayşegül Ladin SÜMER

    (Independent Researcher, Turkey)

Abstract

While real business cycle model excluded nominal demand and monetary changes in proof of aggregate output fluctuations, the 2008 crisis proved otherwise. The systemic risk that emerged in this process affected the financial and real sector transmission mechanism towards a contraction. Macroprudential policy brought a solution to the problem, especially with banking loan activities. The aim of this study is to explain the methodological relationship between real business cycle model and macroprudential policy intervention based on the results of the 2008 crisis. In the study, the lack of information set limits the methodological relationship, including the duration of real economic shocks, the degree of interaction between the financial and real sector, and the magnitude of the credit cycle volatility.

Suggested Citation

  • Ayşegül Ladin SÜMER, 2021. "Evaluation of the methodological relationship between real business cycle model and macroprudential policy," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(628), A), pages 57-64, Autumn.
  • Handle: RePEc:agr:journl:v:3(628):y:2021:i:3(628):p:57-64
    as

    Download full text from publisher

    File URL: http://store.ectap.ro/articole/1555.pdf
    Download Restriction: no

    File URL: http://www.ectap.ro/articol.php?id=1555&rid=144
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Grace, Therese & Hallissey, Niamh & Woods, Maria, 2015. "The Instruments of Macro-Prudential Policy," Quarterly Bulletin Articles, Central Bank of Ireland, pages 90-105, January.
    2. Rojas, Diego & Vegh, Carlos & Vuletin, Guillermo, 2022. "The macroeconomic effects of macroprudential policy: Evidence from a narrative approach," Journal of International Economics, Elsevier, vol. 139(C).
    3. Codruta Boar & Leonardo Gambacorta & Giovanni Lombardo & Luiz Awazu Pereira da Silva, 2017. "What are the effects of macroprudential policies on macroeconomic performance?," BIS Quarterly Review, Bank for International Settlements, September.
    4. Jean-Christophe Poutineau & Gauthier Vermandel, 2017. "A Welfare Analysis of Macroprudential Policy Rules in the Euro Area," Revue d'économie politique, Dalloz, vol. 127(2), pages 191-226.
    5. Kyriakos C. Neanidis, 2015. "Volatile Capital Flows and Economic Growth: The Role of Macro-prudential Regulation," Centre for Growth and Business Cycle Research Discussion Paper Series 215, Economics, The University of Manchester.
    6. Jean-Christophe Poutineau & Gauthier Vermandel, 2017. "A Welfare Analysis of Macroprudential Policy Rules in the Euro Area," Post-Print hal-01619806, HAL.
    7. Kim, Soyoung, 2019. "Macroprudential Policy in Asian Economies," ADB Economics Working Paper Series 577, Asian Development Bank.
    8. Bennett T. McCallum, 1988. "Real Business Cycle Models," NBER Working Papers 2480, National Bureau of Economic Research, Inc.
    9. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-1370, November.
    10. Nobuhiro Kiyotaki, 2011. "A perspective on modern business cycle theory," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 97(3Q), pages 195-208.
    11. Lee, Minsoo & Gaspar, Raymond & Villaruel, Mai Lin, 2017. "Macroprudential Policy Frameworks in Developing Asian Economies," ADB Economics Working Paper Series 510, Asian Development Bank.
    12. Björn Richter & Moritz Schularick & Ilhyock Shim, 2018. "The macroeconomic effects of macroprudential policy," BIS Working Papers 740, Bank for International Settlements.
    13. Deng, Binbin, 2009. "Real Business Cycle Theory-A Systematic Review," MPRA Paper 17932, University Library of Munich, Germany.
    14. repec:zbw:bofitp:2017_004 is not listed on IDEAS
    15. repec:fip:fedreq:y:2011:i:3q:p:195-208:n:vol.97no.3 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eller, Markus & Hauzenberger, Niko & Huber, Florian & Schuberth, Helene & Vashold, Lukas, 2021. "The impact of macroprudential policies on capital flows in CESEE," Journal of International Money and Finance, Elsevier, vol. 119(C).
    2. M.S.Rafiq, 2006. "Business Cycle Moderation - Good Policies or Good Luck: Evidence and Explanations for the Euro Area," Discussion Paper Series 2006_21, Department of Economics, Loughborough University.
    3. Malmierca, María, 2023. "Optimal macroprudential and fiscal policy in a monetary union," Economic Modelling, Elsevier, vol. 122(C).
    4. Robert A. Hart & J Malley (University of Glasgow), 1996. "Labor Productivity and the Cycle," Working Papers 9613, Business School - Economics, University of Glasgow.
    5. Robert J. Barro, 1989. "New Classicals and Keynesians, or the Good Guys and the Bad Guys," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 125(III), pages 263-273, September.
    6. Coman, Andra, 2023. "Monetary policy spillovers and the role of prudential policies in the European Union," Working Paper Series 2854, European Central Bank.
    7. David E. Altig & Charles T. Carlstrom, 1991. "Inflation, personal taxes, and real output: a dynamic analysis," Proceedings, Federal Reserve Bank of Cleveland, pages 547-579.
    8. Ambler, Steven & Cardia, Emanuela & Phaneuf, Louis, 1992. "Contrats de salaire, croissance endogène et fluctuations," L'Actualité Economique, Société Canadienne de Science Economique, vol. 68(1), pages 175-204, mars et j.
    9. Philip O. Alege & Queen-Esther Oye & Omobola O. Adu & Barnabas Amu & Tolu Owolabi, 2017. "Carbon Emissions and the Business Cycle in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 7(5), pages 1-8.
    10. Rodolfo Mendez-Marcano, 2014. "Technology, Employment, and the Oil-Countries Business Cycle," Working Papers 1405, BBVA Bank, Economic Research Department.
    11. Watson, Mark W, 1993. "Measures of Fit for Calibrated Models," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 1011-1041, December.
    12. Franta, Michal & Gambacorta, Leonardo, 2020. "On the effects of macroprudential policies on Growth-at-Risk," Economics Letters, Elsevier, vol. 196(C).
    13. Eduardo L. Giménez & José María Martín-Moreno, "undated". "Title: Monetary shocks and business cicle in the Spanish economy," Studies on the Spanish Economy 43, FEDEA.
    14. Olkhov, Victor, 2018. "Economic Transactions Govern Business Cycles," MPRA Paper 87207, University Library of Munich, Germany.
    15. Stockman, Alan C., 1988. "Sectoral and national aggregate disturbances to industrial output in seven European countries," Journal of Monetary Economics, Elsevier, vol. 21(2-3), pages 387-409.
    16. Victor Olkhov, 2018. "How Macro Transactions Describe the Evolution and Fluctuation of Financial Variables," IJFS, MDPI, vol. 6(2), pages 1-19, March.
    17. Irawan, Denny & Okimoto, Tatsuyoshi, 2021. "Overinvestment and macroeconomic uncertainty: Evidence from renewable and non-renewable resource firms," Journal of Economic Dynamics and Control, Elsevier, vol. 126(C).
    18. Finn E. Kydland & Edward C. Prescott, 1996. "The Computational Experiment: An Econometric Tool," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 69-85, Winter.
    19. Olkhov, Victor, 2018. "The Business Cycle Model Beyond General Equilibrium," MPRA Paper 87204, University Library of Munich, Germany.
    20. Minford, Patrick & Nowell, Eric & Meenagh, David & Sofat, Prakriti, 2005. "Real Exchange Rate Overshooting RBC Style," CEPR Discussion Papers 5029, C.E.P.R. Discussion Papers.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:agr:journl:v:3(628):y:2021:i:3(628):p:57-64. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mircea Dinu (email available below). General contact details of provider: https://edirc.repec.org/data/agerrea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.