【经管院每周系列讲座第343期】Financial Openness, Bank Capital Flows and the Effectiveness of Macroprudential Policy
主题：Financial Openness, Bank Capital Flows and the Effectiveness of Macroprudential Policy
Dr. Hao Jin obtained his Ph.D. in economics from Indiana University in 2016. He also holds master degrees in statistics and economics from Cornell University and the University of California Santa Barbara. He obtained his Bachelor’s degree from Xiamen University. His working paper is R&R at Review of Economic Dynamics.
This paper quantitatively examines the effects of macroprudential policies on credit growth in open economies. We develop a small open economy DSGE model where banks endogenously choose their funding sources (domestic vs. foreign deposits) and subject to financial constraints. Our model predicts that banks increasingly rely on foreign funding in response to a macroprudential policy tightening. We show that this funding composition shift significantly undermines the stabilizing effect and welfare gains of macroprudential policies. Our results suggest macroprudential policies are less effective in financially more open economies, and it is desirable to complement macroprudential policies with capital controls. We find empirical support for the model predictions in a group of emerging and developing economies.