Examining the effectiveness of macroprudential policy in India

Kumar, S. and Prabheesh, K P and Bashar, O. (2022) Examining the effectiveness of macroprudential policy in India. Economic Analysis and Policy, 75. pp. 91-113. ISSN 0313-5926

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Abstract

This study empirically examines the effectiveness of macroprudential policy (MaPP) on bank credit, housing credit, and housing prices in the Indian context. The study uses structural vector autoregression (SVAR) during 2004M04–2020M03 and reveals that MaPP effectively limits bank credit, housing credit, and housing price appreciations. Furthermore, the study provides evidence of the asymmetric effect of MaPP, implying that MaPP tightening considerably affects bank credit and housing prices, whereas MaPP loosening considerably affects housing credit. Finally, our analysis indicates that MaPP effectively limits housing prices across cities in India. © 2022 Economic Society of Australia, Queensland

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IITH Creators:

IITH Creators	ORCiD
Prabheesh, K P	https://orcid.org/0000-0001-6323-8217

Item Type:

Article

Additional Information:

This article is drawn from a chapter of the Ph.D. thesis of the first author Sanjiv Kumar, IIT, Hyderabad, Telangana, India. A proportion of this paper is also done during staying period at Swinburne University of Technology, Australia. The earlier version of this paper was presented at the 15 Bulletin of Monetary Economics and Banking International Conference, Bali, Indonesia .

Uncontrolled Keywords:

Credit, Housing prices, Macroprudential policy, Structural vector autoregression

Subjects:

Social sciences > Political Science & Economics
Social sciences > Business Finance

Divisions:

Department of Liberal Arts

Depositing User:

. LibTrainee 2021

Date Deposited:

20 Jun 2022 04:28

Last Modified:

20 Jun 2022 11:51