scholarly journals Household and Firm Leverage, Capital Flows and Monetary Policy in a Small Open Economy

2013 ◽  
Author(s):  
Mara Pirovano
Keyword(s):  
Monetary Policy ◽  
Open Economy ◽  
Capital Flows ◽  
Small Open Economy ◽  
Firm Leverage

Financial openness, bank capital flows, and the effectiveness of macroprudential policies

2021 ◽  
pp. 1-32
Author(s):  
Hao Jin ◽  
Chen Xiong
Keyword(s):  
Open Economy ◽  
Capital Flows ◽  
Open Economies ◽  
Small Open Economy ◽  
Empirical Support ◽  
Bank Capital ◽  
Macroprudential Policy ◽  
Funding Sources ◽  
Macroprudential Policies ◽  
Dynamic Stochastic

Abstract This paper quantitatively examines the macroeconomic and welfare effects of macroprudential policies in open economies. We develop a small open economy dynamic stochastic general equilibrium (DSGE) model, where banks choose their funding sources (domestic vs. foreign deposits) and are subject to financial constraints. Our model predicts that banks reduce leverage in response to a macroprudential policy tightening, but increasingly rely on foreign funding. This endogenous shifts of funding composition significantly undermine the stabilizing effect and welfare gains of macroprudential policies. Our results also suggest macroprudential policies are less effective in financially more open economies, and optimal policy should take capital flows into consideration. Finally, we find empirical support for the model predictions in a group of developing and emerging economies.

ASSET PRICES, OUTPUT AND MONETARY POLICY IN A SMALL OPEN ECONOMY

2008 ◽  
Vol 59 (4) ◽  
pp. 666-686 ◽  
Author(s):  
Christopher Malikane ◽  
Willi Semmler
Keyword(s):  
Monetary Policy ◽  
Open Economy ◽  
Asset Prices ◽  
Small Open Economy

Monetary policy announcements and stock price dynamics in a small open economy

2011 ◽  
Vol 20 (4) ◽  
pp. 520-531 ◽  
Author(s):  
Chi-Chur Chao ◽  
Shih-Wen Hu ◽  
Meng-Yi Tai ◽  
Vey Wang
Keyword(s):  
Monetary Policy ◽  
Open Economy ◽  
Stock Price ◽  
Small Open Economy ◽  
Price Dynamics
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