The real effects of macroprudential policy: Evidence from micro data

Abstract

This paper investigates the real effects of macroprudential policy (MaPP) using individual data from 122 countries. The empirical analysis shows that MaPP increases savings and decreases borrowing. These effects are then disaggregated by policy tool, interest rate and country income level. The effects of MaPP on individual behavior depend to a large extent on the policy tool and the country income level and to a lesser extent on the interest rate. These results stand up to a variety of endogeneity tests that include propensity score matching and an instrumental variable approach.