Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/178499
Authors: 
Crespo-Cuaresma, Jesus
Schweinitz, Gregor von
Wendt, Katharina
Year of Publication: 
2018
Series/Report no.: 
IWH Discussion Papers 8/2018
Abstract: 
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.
Subjects: 
reserve requirements
macroprudential policy
credit growth
economic growth
Bayesian model averaging
JEL: 
C11
E44
F43
G28
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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