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A Welfare Analysis of Macroprudential Policy Rules in the Euro Area

Listed author(s):
  • Jean-Christophe Poutineau
  • Gauthier Vermandel

In an estimated DSGE model of the European Monetary Union that accounts for financial differences between core and peripheral countries, we find that country-adjusted macroprudential measures lead to significant welfare gains with respect to a uniform macroprudential policy rule that reacts to union-wide financial developments. However, peripheral countries are the winners from the implementation of macroprudential measures while core countries incur welfare losses, thus questioning the interest of adopting coordinated macroprudential measures with peripheral countries.

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Article provided by Dalloz in its journal Revue d'économie politique.

Volume (Year): 127 (2017)
Issue (Month): 2 ()
Pages: 191-226

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Handle: RePEc:cai:repdal:redp_272_0191
Contact details of provider: Web page: http://www.cairn.info/revue-d-economie-politique.htm

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