Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/232592 
Year of Publication: 
2021
Series/Report no.: 
Sveriges Riksbank Working Paper Series No. 389
Publisher: 
Sveriges Riksbank, Stockholm
Abstract: 
What are the effects of different borrower-based macroprudential tools when both real and nominal interest rates are low? We study this question in a New Keynesian model featuring long-term debt, housing transaction costs and a zero lower bound constraint on policy rates. We find that the long-term costs, in terms of output losses, of all the macroprudential tools we consider are moderate. However, the short-term costs differ substantially between tools. Moreover, the costs vary depending on the current state of economy and monetary policy. Specifically, a loan-to-value tightening is more than three times as contractionary compared to a loan-to-income tightening when debt is high and monetary policy cannot accommodate.
Subjects: 
Household debt
Zero lower bound
New Keynesian model
Collateral andborrowing constraints
Mortgage interest deductibility
Housing prices
JEL: 
E52
E58
Document Type: 
Working Paper

Files in This Item:
File
Size
736.48 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.