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International financial positions and macroprudential policy

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  • Malmierca, María

Abstract

The increasing financial integration in the Euro Area brings numerous advantages for the national and worldwide economies. However, it also entails the risk of fast crisis contagion and widespread economic and financial destabilization. Thus, there is an important role for macroprudential policy in this context, to ensure a sustainable and stable financial integration. But the economic and financial stabilization properties and spillovers of macroprudential regulation vary across borders. Using a two-country new Keynesian model for a monetary union I find that the international financial positions of the economies might determine the macroprudential policy effects after a symmetric financial shock.

Suggested Citation

  • Malmierca, María, 2021. "International financial positions and macroprudential policy," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 1034-1062.
    • Handle: RePEc:eee:reveco:v:76:y:2021:i:c:p:1034-1062
    DOI: 10.1016/j.iref.2021.07.013
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    More about this item

    Keywords

    International financial markets; Financial frictions; Spillover; Stabilization; Financial integration; DSGE;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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