Assessing the Gains from International Macroprudential Policy Cooperation

Pierre Richard Agénor, Timothy Jackson, Enisse Kharroubi, Leonardo Gambacorta, Giovanni Lombardo, Luiz A.Pereira Da Silva

Research output: Contribution to journalArticlepeer-review


We study the effects of coordinated and noncoordinated macroprudential policies in a core–periphery model that emphasizes the role of international financial centers. After documenting empirically the existence of cross-country macroprudential spillovers and policy interdependence, we derive a number of results. First, even absent financial frictions, self-oriented policymakers attempt to manipulate asset prices to their advantage, resulting in higher long-run capital taxes. Second, financial frictions generate a subsidization bias, as policymakers aim at eliminating the inefficiency wedge between the cost of capital and the deposit rate. Third, self-oriented national policies imply insufficient subsidies in the long run and wider efficiency gaps in the short run, resulting in substantial gains from cooperation.

Original languageEnglish
Pages (from-to)1819-1866
Number of pages48
JournalJournal of Money, Credit and Banking
Issue number7
Publication statusPublished - Oct 2021


  • financial frictions
  • financial policies
  • international policy cooperation
  • international spillovers
  • macroprudential policies


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