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The impact of macroprudential policies on industrial growth

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  • Carlos Madeira

Abstract

This paper analyses the causal impact of macroprudential policies on growth, using industry-level data for 89 countries for the period 1990 to 2021. The small industry size creates an exogenous identification and avoids reverse-causality. I find that macroprudential tightening measures have a negative impact on manufacturing growth, but only for industries with high external finance dependence. This effect is stronger during banking crises, periods of higher output growth and for advanced economies. The effect is weaker during period of high private credit growth. Growth effects on externally dependent industries are economically sizeable and can persist over three years.

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  • Carlos Madeira, 2024. "The impact of macroprudential policies on industrial growth," BIS Working Papers 1191, Bank for International Settlements.
    • Handle: RePEc:bis:biswps:1191
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    Cited by:

    1. Madeira, Carlos, 2024. "The impact of macroprudential policies on industrial growth," Journal of International Money and Finance, Elsevier, vol. 145(C).
    2. Henry Penikas, 2021. "Review of Bank of Russia – NES Workshop 'Identification and Measurement of Macroprudential Policies Effects'," Russian Journal of Money and Finance, Bank of Russia, vol. 80(3), pages 94-104, September.
    3. Carlos Madeira, 2023. "The evolution of macroprudential policy use in Chile, Latin America and the OECD," Journal of Banking Regulation, Palgrave Macmillan, vol. 24(3), pages 357-380, September.
    4. Mikhail I. Stolbov & Maria A. Shchepeleva & Alexander M. Karminsky, 2021. "A global perspective on macroprudential policy interaction with systemic risk, real economic activity, and monetary intervention," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-25, December.

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    More about this item

    Keywords

    macroprudential policy; financial development; growth; external finance dependence; credit frictions;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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