On the Empirics of Reserve Requirements and Economic Growth

Crespo Cuaresma J, von Schweinitz G, & Wendt K (2019). On the Empirics of Reserve Requirements and Economic Growth. Journal of Macroeconomics 60: 253-274. DOI:10.1016/j.jmacro.2019.03.004.

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Abstract

Reserve requirements, as a tool of macroprudential policy, have been increasingly employed since the outbreak of the great financial crisis. We conduct an analysis of the effect of reserve requirements in tranquil and crisis times on long-run growth rates of GDP per capita and credit (%GDP) making use of Bayesian model averaging methods. Regulation has on average a negative effect on GDP in tranquil times, which is only partly offset by a positive (but not robust effect) in crisis times. Credit over GDP is positively affected by higher requirements in the longer run.

Item Type: Article
Uncontrolled Keywords: Reserve requirements; Macroprudential policy; Credit growth; Economic growth; Bayesian model averaging
Research Programs: World Population (POP)
Depositing User: Luke Kirwan
Date Deposited: 26 Mar 2019 09:22
Last Modified: 24 Sep 2019 08:53
URI: http://pure.iiasa.ac.at/15812

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