Macroprudential policy in Asia

This paper analyses the conduct and the effects of macroprudential policy in 11 Asian economies, some of which used macroprudential instruments frequently already before the Great Financial Crisis. Data are quarterly for the period 2000-2014. The frequency of macroprudential measures has generally increased after the crisis, and policies are generally tightened during the upswing of a bank credit cycle. Estimates from panel vector autoregression models show that contractionary macroprudential policy shocks have negative effects on credit and output that are qualitatively similar to those of monetary policy. The results suggest that policy conflicts when credit growth is strong and the real economy is weak may be resolved through complementary use of macroprudential and monetary policy instruments. (C) 2019 Elsevier Inc. All rights reserved.