TY - JOUR
T1 - Global banking, financial spillovers and macroprudential policy coordination
AU - Agénor, Pierre Richard
AU - Jackson, Timothy P.
AU - Pereira da Silva, Luiz A.
N1 - Publisher Copyright:
© 2023 The Authors. Economica published by John Wiley & Sons Ltd on behalf of London School of Economics and Political Science.
PY - 2023/7/1
Y1 - 2023/7/1
N2 - The transmission of financial shocks and the gains from international macroprudential policy coordination are studied in a two-region, core–periphery model with a global bank, a two-level financial structure and imperfect financial integration. The model replicates the stylized facts associated with global banking shocks, with respect to output, credit, house prices and real exchange rate fluctuations in recipient countries, as documented empirically. Numerical experiments, based on a parametrized version of the model, show that the gains from coordination increase with the degree of financial integration, which raises the scope for spillback effects from the periphery to the core, through trade and private capital flows. However, even when coordination is Pareto-improving, the resulting gains may be highly asymmetric across regions.
AB - The transmission of financial shocks and the gains from international macroprudential policy coordination are studied in a two-region, core–periphery model with a global bank, a two-level financial structure and imperfect financial integration. The model replicates the stylized facts associated with global banking shocks, with respect to output, credit, house prices and real exchange rate fluctuations in recipient countries, as documented empirically. Numerical experiments, based on a parametrized version of the model, show that the gains from coordination increase with the degree of financial integration, which raises the scope for spillback effects from the periphery to the core, through trade and private capital flows. However, even when coordination is Pareto-improving, the resulting gains may be highly asymmetric across regions.
U2 - 10.1111/ecca.12475
DO - 10.1111/ecca.12475
M3 - Article
AN - SCOPUS:85159111478
SN - 0013-0427
VL - 90
SP - 1003
EP - 1040
JO - Economica
JF - Economica
IS - 359
ER -