Credit Booms, Financial Crises and Macroprudential Policy / Mark Gertler, Nobuhiro Kiyotaki, Andrea Prestipino.

Format:

Book

Author/Creator:

Gertler, Mark.

Contributor:

National Bureau of Economic Research.

Kiyotaki, Nobuhiro.

Prestipino, Andrea.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27481.

NBER working paper series no. w27481

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

We develop a model of banking crises which Is consistent with two important features of the data: First, banking crises are usually preceded by credit booms. Second, credit booms often do not result in a crisis. That is, there are "good" booms as well as "bad" booms in the language of Gorton and Ordonez (2019). We then consider how the optimal macroprudential policy weighs the benefits of preventing a crisis against the costs of stopping a good boom. We show that countercyclical capital buffers are a critical feature of a successful macropudential policy.

Notes:

Print version record

July 2020.