Arbeitspapier
MEDSEA-FIN: A DSGE model of the Maltese economy with housing and financial frictions
We extend the Central Bank of Malta's core DSGE model - MEDSEA - with housing and financial frictions to capture the important theoretical links betweeen house prices, credit and consumption. The model features a rich set of features that are inherent to small open economies in a monetary union. We add a borrowing constraint on a subset of households that is contigent on the value of housing wealth and a maximum loan-to-value (LTV) ratio. We also impose capital requirements on the financial intermediary through a minimum capital-to-assets ratio (CAR) constraint. These two requirements form the basis of a typical macroprudential regime in a developed economy. We show how the macroprudential authority can dampen the rise in credit and consumption during a credit boom by using these two policy tools to 'lean against the wind'. MEDSEA-FIN is therefore tailored to study macro-financial issues related to housing and credit, and the adequate policy responses.
- Sprache
-
Englisch
- Erschienen in
-
Series: CBM Working Papers ; No. WP/04/2020
- Klassifikation
-
Wirtschaft
Quantitative Policy Modeling
Financial Markets and the Macroeconomy
Central Banks and Their Policies
Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
- Thema
-
borrowing constraints
loan-to-value ratio
capital-to-assets ratio
macroprudential policy
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Gatt, William
Rapa, Noel
Brugnolini, Luca
- Ereignis
-
Veröffentlichung
- (wer)
-
Central Bank of Malta
- (wo)
-
Valletta
- (wann)
-
2020
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Gatt, William
- Rapa, Noel
- Brugnolini, Luca
- Central Bank of Malta
Entstanden
- 2020
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