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E32

Business Fluctuations; Cycles

The optimal monetary and macroprudential policies for the South African economy

Guangling Liu and Thabang Molisey
We investigate the optimal design and e ectiveness of monetary and macroprudential policies in promoting macroeconomic (price) and financial stability for the South African economy. We develop a New Keynesian dynamic stochastic general equilibrium model featuring a housing market, a banking sector...
Feb 2020
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A New Keynesian DSGE model for Low Income Economies with Foreign Exchange Constraints

Bertha C. Bangara
The existing literature is clear that low income economies tend to suffer from foreign exchange shortages exacerbated by their exports. Most importantly, the concentration of their exports renders these countries susceptible to international price fluctuations. This frequently affects the level of...
Sep 2019
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The effectiveness of counter-cyclical loan-to-value regulations: generic versus sector-specific rules

Guangling Liu and Thabang Molise
This paper considers the implications of the counter-cyclical loan-to-value (CcLTV) regulation in a setting where different types of borrowers from distinct sectors of the credit market co-exist. To identify the optimal policy design, we consider two macro-prudential policy regimes, nanely generic...
Aug 2019
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Fiscal Policy and Adjustment in a Foreign Exchange Constrained Economy: Evidence from Malawi

Bertha C. Bangara and Amos C. Peters
Most of the recent literature analysing the adjustments of macroeconomic variables to fiscal policy shocks rely on the inclusion of non-Ricardian households to generate a positive response of consumption to an increase in government spending. This paper examines the dynamic effects of government...
Apr 2019
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Optimal Monetary Policy with Output and Asset Price Volatility in an Open Economy: Evidence from Kenya

Peter Wamalwa
This paper attempts to establish optimal response of monetary policy to output, inflation and asset price volatility in a small open economy, taking into account optimisation behaviour of households and firms. The empirical analysis suggest that monetary policy responds to deviation of interest...
Feb 2018
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Macroprudential policy and foreign interest rate shocks: A comparison of different instruments and regulatory regimes

Chris Garbers and Guangling Liu
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...
Oct 2017
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