On the empirics of reserve requirements and economic growth

Arbeitspapier

Reserve requirements, as a tool of macroprudential policy, have been increasingly employed since the outbreak of the great financial crisis. We conduct an analysis of the effect of reserve requirements in tranquil and crisis times on credit and GDP growth making use of Bayesian model averaging methods. In terms of credit growth, we can show that initial negative effects of higher reserve requirements (which are often reported in the literature) tend to be short-lived and turn positive in the longer run. In terms of GDP per capita growth, we find on average a negative but not robust effect of regulation in tranquil times, which is only partly offset by a positive but also not robust effect in crisis times.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IWH Discussion Papers ; No. 8/2018

Classification and Topics

• Classification: Wirtschaft ; Bayesian Analysis: General ; Financial Markets and the Macroeconomy ; Economic Growth of Open Economies ; Financial Institutions and Services: Government Policy and Regulation
• Subject: reserve requirements ; macroprudential policy ; credit growth ; economic growth ; Bayesian model averaging

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Crespo-Cuaresma, Jesus ; Schweinitz, Gregor von ; Wendt, Katharina
• Event: Veröffentlichung
• (who): Leibniz-Institut für Wirtschaftsforschung Halle (IWH)
• (where): Halle (Saale)
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/178499
• URN: urn:nbn:de:gbv:3:2-90902
• Last update: 10.03.2025, 11:43 AM CET