Global banking, financial spillovers and macroprudential policy coordination

Agénor, Pierre‐Richard, Jackson, Timothy P ORCID: 0000-0002-6142-8882 and Pereira da Silva, Luiz A (2023) Global banking, financial spillovers and macroprudential policy coordination. Economica, 90 (359). pp. 1003-1040.

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Official URL: http://dx.doi.org/10.1111/ecca.12475

Abstract

<jats:title>Abstract</jats:title><jats:p>The transmission of financial shocks and the gains from international macroprudential policy coordination are studied in a two‐region, core–periphery model with a global bank, a two‐level financial structure and imperfect financial integration. The model replicates the stylized facts associated with global banking shocks, with respect to output, credit, house prices and real exchange rate fluctuations in recipient countries, as documented empirically. Numerical experiments, based on a parametrized version of the model, show that the gains from coordination increase with the degree of financial integration, which raises the scope for spillback effects from the periphery to the core, through trade and private capital flows. However, even when coordination is Pareto‐improving, the resulting gains may be highly asymmetric across regions.</jats:p>

Item Type:	Article
Divisions:	Faculty of Humanities and Social Sciences > School of Management
Depositing User:	Symplectic Admin
Date Deposited:	22 May 2023 08:49
Last Modified:	25 Aug 2023 15:16
DOI:	10.1111/ecca.12475
Related URLs:	Author Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3170543