IDEAS home Printed from
   My bibliography  Save this paper

Optimal Macroprudential Policy: Frictions, Redistribution, and Politics


  • andrea prestipino

    (Federal Reserve Board)

  • Ricardo Nunes

    (Federal Reserve Board)

  • Matteo Iacoviello

    (Federal Reserve Board)


We study optimal macroprudential policies in an heterogeneous agent economy with collateral constraints. An enforcement problem results in a collateral constraint that depends on the market value of the borrower's assets. First, we analyze the optimal allocation chosen by a Pareto Planner that cannot solve the enforcement problem faced by the markets and can only affect borrower's policies while taking the supply of credit as given. Second, we study the problem of a Ramsey Planner that can choose taxes that affect both the demand and supply of credit. While the standard macroprudential motive would make it optimal for the Planner to reduce total borrowing, the competitive equilibrium of our model can also feature under-borrowing when the borrower's initial wealth is low enough. Since the model explicitly considers both borrowers and savers, the choice of the loan-to-value ratio and the taxes on assets and borrowing induce distributional effects. We find that the presence of over-borrowing critically depends on only taking into account the welfare of borrowers while disregarding that of savers.

Suggested Citation

  • andrea prestipino & Ricardo Nunes & Matteo Iacoviello, 2016. "Optimal Macroprudential Policy: Frictions, Redistribution, and Politics," 2016 Meeting Papers 1602, Society for Economic Dynamics.
  • Handle: RePEc:red:sed016:1602

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Pierre-Richard Agénor & Leonardo Gambacorta & Enisse Kharroubi & Enisse Kharroubi, 2018. "The effects of prudential regulation, financial development and financial openness on economic growth," BIS Working Papers 752, Bank for International Settlements.

    More about this item


    Access and download statistics


    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:red:sed016:1602. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.