• Corpus ID: 154333810

Evaluation of macroeconomic models for financial stability analysis

  title={Evaluation of macroeconomic models for financial stability analysis},
  author={Gunnar B̊ardsen and Kjersti-Gro Lindquist and Dimitrios P. Tsomocos},
As financial stability has gained focus in economic policymaking, the demand for analyses of financial stability and the consequences of economic policy has increased. Alternative macroeconomic models are available for policy analyses, and this paper evaluates the usefulness of some models from the perspective of financial stability. Financial stability analyses are complicated by the lack of a clear and consensus definition of ‘financial stability’, and the paper concludes that operational… 

Figures from this paper

Inflation targeting when financial stability matters
We model an inflation-targeting central bank with a clear mandate to promote financial stability within the framework of a small open-economy model. The interest rate is the single policy instrument,
The Effects of Prudential Policy Measures on Financial Stability in Post-Transition Countries
The empirical research of prudential measures effectiveness is still scarce, especially for central and southeast European countries. The aim of this paper is to analyze the effects of prudential
Stability: a new FraMework
The vulnerability of a national economy to volatility in the global markets for credit, currencies, commodities, and other assets has become a central concern of policymakers. The responsibility for
Financial stability of banking system in China
This thesis aims at investigating the financial stability of China's banking system. Since the banking system is one of the most important financial intermediaries in the financial systems, the
An equilibrium approach to financial stability analysis: the Colombian case
This paper studies in detail the performance of a general equilibrium model of the financial system when applied to the case of Colombia. This model was designed following closely the work by
Systemic Risks and Financial Fragility in a Small Open Economy
This book contributes to a better understanding of financial system fragility in Bosnia and Herzegovina and similar countries in several ways. It is found that both country and period specifics must
Post-Crisis Challenges for Central Banks
The financial crisis forced central banks to rediscover the importance of financial stability. The aim of the article is to identify and analyze challenges that central banks face in a post-crisis
New Framework for Measuring and Managing Macrofinancial Risk and Financial Stability
This paper proposes a new approach to improve the way central banks can analyze and manage the financial risks of a national economy. It is based on the modern theory and practice of contingent
Credit risk model for the Estonian banking sector
This paper gives an overview of the credit risk model that has been developed for the Estonian banking system. The non-performing loans and loan loss provisions of the four largest banks and the rest
Financial Stability Report
In the first collaboration between climate economists, climate financial risk modellers and financial regulators, we apply the CLIMAFIN framework described in Battiston at al. (2019) to provide a


Equilibrium Analysis, Banking and Financial Instability
This paper first extends the canonical General Equilibrium with Incomplete Markets (GEI) model with money and default to allow for competitive banking and financial instability. Second, it introduces
A model to analyse financial fragility
Summary.This paper sets out a tractable model which illuminates problems relating to individual bank behaviour, to possible contagious inter-relationships between banks, and to the appropriate design
Equilibrium Analysis, Banking, Contagion and Financial Fragility
This paper contains a general equilibrium model of an economy with incomplete markets (GEI) with money and default. The model is a simplified version of the real world consisting of a non-bank
A risk assessment model for banks
Summary.This paper proposes a model to assess risk for banks. Its main innovation is to incorporate endogenous interaction among banks, where the actual risk an individual bank bears also depends on
Monetary policy and asset prices: To respond or not?
We investigate whether there is a case for asset prices in interest rates rules within a small econometric model of the Norwegian economy, modeling the interdependence of the real economy, credit and
Monetary policy predictability in the euro area: an international comparison
We evaluate the ability of market participants to anticipate monetary policy decisions in 14 countries. First, by looking at both the magnitude and volatility of changes in the money market rates we
Otmar Issing : Monetary and financial stability-is there a trade-off ?
Let me start by defining what I mean with monetary and financial stability. Monetary stability is a synonym for price stability. Price stability refers to a stable price level or a low level of
The Financial Accelerator in a Quantitative Business Cycle Framework
This paper develops a dynamic general equilibrium model that is intended to help clarify the role of credit market frictions in business fluctuations, from both a qualitative and a quantitative
Some new directions for financial stability
When the in-coming Labour government in the UK transferred responsibility for the supervision of banks to the newly formed Financial Services Authority (FSA) in May 1997, at the same time it
The Financial Instability Hypothesis
The Financial Instability Hypothesis (FIH) has both empirical and theoretical aspects that challenge the classic precepts of Smith and Walras, who implied that the economy can be best understood by