IDEAS home Printed from https://ideas.repec.org/p/rza/wpaper/719.html
   My bibliography  Save this paper

Macroprudential policy and foreign interest rate shocks: A comparison of different instruments and regulatory regimes

Author

Listed:
  • Chris Garbers
  • Guangling Dave Liu

Abstract

This paper presents a generic small open economy real business cycle model with banking and foreign borrowing. We incorporate capital requirements, reserve requirements, and loan-to-value (LTV) regulation into this framework, and subject the model to a positive foreign interest rate shock that raises the country risk premium and reduces the supply of foreign funds. The […]

Suggested Citation

  • Chris Garbers & Guangling Dave Liu, 2017. "Macroprudential policy and foreign interest rate shocks: A comparison of different instruments and regulatory regimes," Working Papers 719, Economic Research Southern Africa.
    • Handle: RePEc:rza:wpaper:719
    as

    Download full text from publisher

    File URL: https://econrsa.org/wp-content/uploads/2022/06/working_paper_719.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Peter T. Leeson, 2007. "Trading with Bandits," Journal of Law and Economics, University of Chicago Press, vol. 50(2), pages 303-321.
    2. Hodgson, Geoffrey M., 2015. "Much of the ‘economics of property rights’ devalues property and legal rights," Journal of Institutional Economics, Cambridge University Press, vol. 11(4), pages 683-709, December.
    3. Sweet, Cassandra Mehlig & Eterovic Maggio, Dalibor Sacha, 2015. "Do Stronger Intellectual Property Rights Increase Innovation?," World Development, Elsevier, vol. 66(C), pages 665-677.
    4. Jacques du Toit, 2010. "Local metropolitan government responses to homelessness in South Africa," Development Southern Africa, Taylor & Francis Journals, vol. 27(1), pages 111-128.
    5. Thomas Markussen & Finn Tarp & Katleen Van den Broeck, 2009. "The Forgotten Property Rights: Restrictions on Land Use in Vietnam," Discussion Papers 09-21, University of Copenhagen. Department of Economics.
    6. Ekkehart Schlicht, 2008. "Consistency in Organization," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(4), pages 612-623, December.
    7. Edella Schlager & Elinor Ostrom, 1992. "Property-Rights Regimes and Natural Resources: A Conceptual Analysis," Land Economics, University of Wisconsin Press, vol. 68(3), pages 249-262.
    8. Matthew Murphy & François Perrot & Miguel Rivera-Santos, 2012. "New perspectives on learning and innovation in cross-sector collaborations," Post-Print hal-02313075, HAL.
    9. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    10. Ostrom, Elinor & Walker, James & Gardner, Roy, 1992. "Covenants with and without a Sword: Self-Governance Is Possible," American Political Science Review, Cambridge University Press, vol. 86(2), pages 404-417, June.
    11. Monkkonen, Paavo, 2016. "Where do Property Rights Matter More? Explaining the Variation in Demand for Property Titles across Cities in Mexico," World Development, Elsevier, vol. 88(C), pages 67-78.
    12. Williamson, Oliver E, 1993. "Calculativeness, Trust, and Economic Organization," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 453-486, April.
    13. Barzel,Yoram, 1997. "Economic Analysis of Property Rights," Cambridge Books, Cambridge University Press, number 9780521597135, February.
    14. John Luiz & Callum Stewart, 2014. "Corruption, South African Multinational Enterprises and Institutions in Africa," Journal of Business Ethics, Springer, vol. 124(3), pages 383-398, October.
    15. Bat Batjargal & Michael Hitt & Anne Tsui & Jean-Luc Arregle & Justin Webb & Toyah Miller, 2013. "Institutional Polycentrism, Entrepreneurs' Social Networks, and New Venture Growth," Post-Print hal-02276709, HAL.
    16. Alston, Lee J. & Harris, Edwyna & Mueller, Bernardo, 2012. "The Development of Property Rights on Frontiers: Endowments, Norms, and Politics," The Journal of Economic History, Cambridge University Press, vol. 72(3), pages 741-770, August.
    17. Feige, Edgar L., 1990. "Defining and estimating underground and informal economies: The new institutional economics approach," World Development, Elsevier, vol. 18(7), pages 989-1002, July.
    18. Robert C. Ellickson, 2011. "Two Cheers for the Bundle-of-Sticks Metaphor, Three Cheers for Merrill and Smith," Econ Journal Watch, Econ Journal Watch, vol. 8(3), pages 215-222, September.
    19. Bat Batjargal, 2013. "Institutional Polycentrism, Entrepreneurs??? Social Networks, And New Venture Growth," William Davidson Institute Working Papers Series wp1060, William Davidson Institute at the University of Michigan.
    20. Murphy, Matthew & Perrot, Francois & Rivera-Santos, Miguel, 2012. "New perspectives on learning and innovation in cross-sector collaborations," Journal of Business Research, Elsevier, vol. 65(12), pages 1700-1709.
    21. Thomas W. Merrill & Henry E. Smith, 2011. "Making Coasean Property More Coasean," Journal of Law and Economics, University of Chicago Press, vol. 54(S4), pages 77-104.
    22. Barzel, Yoram, 2015. "What are ‘property rights’, and why do they matter? A comment on Hodgson's article," Journal of Institutional Economics, Cambridge University Press, vol. 11(4), pages 719-723, December.
    23. Brown, Alison, 2015. "Claiming the Streets: Property Rights and Legal Empowerment in the Urban Informal Economy," World Development, Elsevier, vol. 76(C), pages 238-248.
    24. Muthoo, Abhinay, 2004. "A model of the origins of basic property rights," Games and Economic Behavior, Elsevier, vol. 49(2), pages 288-312, November.
    25. Mike W Peng & Denis Y L Wang & Yi Jiang, 2008. "An institution-based view of international business strategy: a focus on emerging economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(5), pages 920-936, July.
    26. Nicolas Dahan & Jonathan P. Doh & Jennifer Oetzel & Michael Yaziji, 2010. "Corporate-NGO Collaboration: Co-creating New Business Models for Developing Markets," Post-Print hal-00565517, HAL.
    27. Johanna Mair & Ignasi Marti & Marc Ventresca, 2012. "Building Inclusive Markets in Rural Bangladesh : How Intermediaries Work Institutional Voids," Post-Print hal-02276707, HAL.
    28. Eric R. Claeys, 2011. "Bundle-of-Sticks Notions in Legal and Economic Scholarship," Econ Journal Watch, Econ Journal Watch, vol. 8(3), pages 205-214, September.
    29. Webster, Chris & Wu, Fulong & Zhang, Fangzhu & Sarkar, Chinmoy, 2016. "Informality, property rights, and poverty in China’s “favelas”," World Development, Elsevier, vol. 78(C), pages 461-476.
    30. Acheson, James M, 1985. "The Maine Lobster Market: Between Market and Hierarchy," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 1(2), pages 385-398, Fall.
    31. Bat Batjargal & Michael Hitt & Anne Tsui & Jean-Luc Arregle & Justin Webb & Toyah Miller, 2013. "Institutional Polycentrism, Entrepreneurs' Social Networks, and New Venture Growth," Post-Print hal-02313079, HAL.
    32. Markussen, Thomas & Tarp, Finn & Van Den Broeck, Katleen, 2011. "The Forgotten Property Rights: Evidence on Land Use Rights in Vietnam," World Development, Elsevier, vol. 39(5), pages 839-850, May.
    33. Johanna Mair & Ignasi Marti & Marc Ventresca, 2012. "Building Inclusive Markets in Rural Bangladesh : How Intermediaries Work Institutional Voids," Post-Print hal-02312706, HAL.
    34. Claudia R. Williamson & Carrie B. Kerekes, 2011. "Securing Private Property: Formal versus Informal Institutions," Journal of Law and Economics, University of Chicago Press, vol. 54(3), pages 537-572.
    35. Richard A. Epstein, 2011. "Bundle-of-Rights Theory as a Bulwark Against Statist Conceptions of Private Property," Econ Journal Watch, Econ Journal Watch, vol. 8(3), pages 223-235, September.
    36. Eggertsson, Thráinn, 2013. "Quick guide to New Institutional Economics," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 1-5.
    37. Smith, Henry E, 2002. "Exclusion versus Governance: Two Strategies for Delineating Property Rights," The Journal of Legal Studies, University of Chicago Press, vol. 31(2), pages 453-487, June.
    38. Galiani,Sebastian & Sened,Itai (ed.), 2014. "Institutions, Property Rights, and Economic Growth," Cambridge Books, Cambridge University Press, number 9781107041554, September.
    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. James Rycroft & John M. Luiz, 2018. "Homelessness, Property Rights, and Institutional Logics," Working Papers 750, Economic Research Southern Africa.
    2. Rossi, Enrico, 2020. "Reconsidering the dual nature of property rights: personal property and capital in the law and economics of property rights," LSE Research Online Documents on Economics 105840, London School of Economics and Political Science, LSE Library.
    3. Harris,Colin & Cai,Meina & Murtazashvili,Ilia & Murtazashvili,Jennifer Brick, 2020. "The Origins and Consequences of Property Rights," Cambridge Books, Cambridge University Press, number 9781108969055, September.
    4. Slade Shantz, Angelique & Kistruck, Geoffrey & Zietsma, Charlene, 2018. "The opportunity not taken: The occupational identity of entrepreneurs in contexts of poverty," Journal of Business Venturing, Elsevier, vol. 33(4), pages 416-437.
    5. Ault, Joshua K. & Spicer, Andrew, 2022. "The formal institutional context of informal entrepreneurship: A cross-national, configurational-based perspective," Research Policy, Elsevier, vol. 51(9).
    6. Zhe Cao & Xianwei Shi, 2021. "A systematic literature review of entrepreneurial ecosystems in advanced and emerging economies," Small Business Economics, Springer, vol. 57(1), pages 75-110, June.
    7. Alisa Sydow & Benedetto Lorenzo Cannatelli & Alessandro Giudici & Mario Molteni, 2022. "Entrepreneurial Workaround Practices in Severe Institutional Voids: Evidence From Kenya," Entrepreneurship Theory and Practice, , vol. 46(2), pages 331-367, March.
    8. Boddewyn, Jean J. & Peng, Mike W., 2021. "Reciprocity and informal institutions in international market entry," Journal of World Business, Elsevier, vol. 56(1).
    9. Liu, Xiaohui & Xia, Tianjiao & Jiangyong, Lu & Lin, Daomi, 2019. "Under what institutional conditions does overseas business knowledge contribute to firm performance?," International Business Review, Elsevier, vol. 28(3), pages 588-602.
    10. Michael A. Hitt & David G. Sirmon & Yuan Li & Abby Ghobadian & Jean-Luc Arregle & Kai Xu, 2021. "Institutions, industries and entrepreneurial versus advantage-based strategies: how complex, nested environments affect strategic choice," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(1), pages 147-188, March.
    11. Mike W. Peng & Joyce C. Wang & Nishant Kathuria & Jia Shen & Miranda J. Welbourne Eleazar, 2023. "Toward an institution-based paradigm," Asia Pacific Journal of Management, Springer, vol. 40(2), pages 353-382, June.
    12. Liedong, Tahiru Azaaviele & Peprah, Augustine Awuah & Amartey, Abednego Okoe & Rajwani, Tazeeb, 2020. "Institutional voids and firms' resource commitment in emerging markets: A review and future research agenda," Journal of International Management, Elsevier, vol. 26(3).
    13. Wafa N. Almobaireek & Ahmed A. Alshumaimeri & Tatiana S. Manolova, 2016. "Building entrepreneurial inter-firm networks in an emerging economy: the role of cognitive legitimacy," International Entrepreneurship and Management Journal, Springer, vol. 12(1), pages 87-114, March.
    14. Kai Xu & Michael A. Hitt, 2020. "The international expansion of family firms: The moderating role of internal financial slack and external capital availability," Asia Pacific Journal of Management, Springer, vol. 37(1), pages 127-153, March.
    15. Liu, Yulong & Ndubisi, Nelson Oly & Liu, Yang & Barrane, Fatima Zahra, 2020. "New product development and sustainable performance of Chinese SMMEs: The role of dynamic capability and intra-national environmental forces," International Journal of Production Economics, Elsevier, vol. 230(C).
    16. Brown Matthew & Cardiff-Hicks Brianna, 2018. "The Tragedy of the Uncommons," Review of Law & Economics, De Gruyter, vol. 14(2), pages 1-22, July.
    17. Chen, Shihua & Ye, Yan & Jia, Fei & Wang, Chengqi, 2022. "Accounting for the role of culture in board directors’ dissent," Research in International Business and Finance, Elsevier, vol. 61(C).
    18. Jianhua Ge & Michael Carney & Franz Kellermanns, 2019. "Who Fills Institutional Voids? Entrepreneurs’ Utilization of Political and Family Ties in Emerging Markets," Entrepreneurship Theory and Practice, , vol. 43(6), pages 1124-1147, November.
    19. Edwards, Griffin & Robinson, Joshua J., 2019. "You gotta fight for your right? Publicly assigned but privately enforced property rights," International Review of Law and Economics, Elsevier, vol. 59(C), pages 31-39.
    20. Bylund, Per L. & McCaffrey, Matthew, 2017. "A theory of entrepreneurship and institutional uncertainty," Journal of Business Venturing, Elsevier, vol. 32(5), pages 461-475.

    More about this item

    Keywords

    Business Cycle; DSGE; Financial Stability; Market Structure; Other Macroeconomic Variables; Welfare;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:rza:wpaper:719. 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: Maggi Sigg (email available below). General contact details of provider: https://edirc.repec.org/data/ersacza.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.