Fiscal Triggers and Debt-Aware Macroprudential Policy

Fiscal Triggers and Debt-Aware Macroprudential Policy

• Autor
• Celso J. Costa-Junior
• Co-autores
• Alejandro C. Garcia-Cintado , Anderson Mutter Teixeira
• Resumo

• Fiscal expansions can coincide with credit booms and rising asset prices. This paper asks whether macroprudential policy should respond to fiscal conditions and whether

  prudential rules should condition on public debt. We study these questions in a medium-scale DSGE model with heterogeneous households, banking frictions, and

  an occasionally binding housing-collateral constraint solved with a piecewise-linear method. The policy analysis uses a 2×2 design that compares state-dependent versus

  time-invariant prudential stance, and debt-aware versus debt-blind rule design. Debt awareness lowers GDP-scaled present-value government spending multipliers

  but increases the welfare gains from adopting a state-dependent prudential stance (consumption-equivalent welfare). The joint design tempers leverage dynamics

  and reduces labor disutility in financially constrained states, implying a negative interaction for multipliers and a positive interaction for welfare.

• Palavras-chave
• macroprudential policy; fiscal-macroprudential interaction; loan-to-value; capital buffers; occasionally binding constraints; DSGE.
• Modalidade
• E-pôster
• Área Temática
• Macrofinanças

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