2016
DOI: 10.3386/w22380
|View full text |Cite
|
Sign up to set email alerts
|

Monetary Versus Macroprudential Policies: Causal Impacts of Interest Rates and Credit Controls in the Era of the UK Radcliffe Report

Abstract: We have entered a world of conjoined monetary and macroprudential policies. But can they function smoothly in tandem, and with what effects? Since this policy cocktail has not been seen for decades, the empirical evidence is almost non-existent. We can only fix this shortcoming in a historical laboratory. The Radcliffe Report (1959), notoriously skeptical about the efficacy of monetary policy, embodied views which led the UK to a three-decade experiment of using credit controls alongside conventional changes i… Show more

Help me understand this report

Search citation statements

Order By: Relevance

Paper Sections

Select...
2
1
1

Citation Types

0
20
0

Year Published

2017
2017
2022
2022

Publication Types

Select...
6
2

Relationship

0
8

Authors

Journals

citations
Cited by 40 publications
(20 citation statements)
references
References 53 publications
0
20
0
Order By: Relevance
“…More specifically: a one percent increase in the policy interest rate brings about a reduction in the fraction of top shareholders of net control of about 13 percent in the US and of 5 percent in the Euro Area; and a one percent decrease in the fraction of top shareholders leads to a 1.5 percent contraction of the nominal GDP deviation from its trend in the Euro Area, and a 2.3 percent contraction in the United States. These results seem to give empirical support to the theses according to which monetary policy can have an impact on the centralization of capital Fontana 2013, 2016;Brancaccio, Califano, Lopreite, Moneta 2019; see also Radcliffe Report 1959;Kaldor 1985;Aikman et al 2016) and capital centralization, in turn, can cause economic recession (Hilferding, 1910;Magdoff and Sweezy, 1987;Lazonick, 1992;Crotty, 1993;Sweezy, 1994;Dore, 2008;Foster et al, 2011).…”
Section: Discussionmentioning
confidence: 80%
See 2 more Smart Citations
“…More specifically: a one percent increase in the policy interest rate brings about a reduction in the fraction of top shareholders of net control of about 13 percent in the US and of 5 percent in the Euro Area; and a one percent decrease in the fraction of top shareholders leads to a 1.5 percent contraction of the nominal GDP deviation from its trend in the Euro Area, and a 2.3 percent contraction in the United States. These results seem to give empirical support to the theses according to which monetary policy can have an impact on the centralization of capital Fontana 2013, 2016;Brancaccio, Califano, Lopreite, Moneta 2019; see also Radcliffe Report 1959;Kaldor 1985;Aikman et al 2016) and capital centralization, in turn, can cause economic recession (Hilferding, 1910;Magdoff and Sweezy, 1987;Lazonick, 1992;Crotty, 1993;Sweezy, 1994;Dore, 2008;Foster et al, 2011).…”
Section: Discussionmentioning
confidence: 80%
“…We intend to verify whether the recent evidences on the increase in centralization of capital in terms of network control (Brancaccio et al 2018) have causal relations with the fluctuations of the GDP around its trend and with monetary policy guidelines in the USA and in the Euro Area between 2001 and 2016. More specifically, we intend to check whether it is possible to find empirical evidences of the theses according to which: 1) monetary policies can have an impact on the solvency conditions in the economic system and the related centralization of capital Fontana 2013, 2016; see also Radcliffe Report 1959;Kaldor 1985;Aikman et al 2016); and 2) capital centralization, in turn, can cause economic depression (Hilferding, 1910;Magdoff and Sweezy, 1987;Lazonick, 1992;Crotty, 1993;Sweezy, 1994;Dore, 2008;Foster et al, 2011). For these scopes, as we shall see in the following sections, we propose an original application of B-VAR analysis on policy interest rates, network control and GDP fluctuations around its trend for USA and Euro Area in the period 2001-2016, before and after the socalled great financial crisis.…”
Section: Network Analysis Business Cycle and Monetary Policy: A Shormentioning
confidence: 99%
See 1 more Smart Citation
“…More generally, the Bank used its authority to cajole private banks into supporting those sectors of the economy deemed of national importance, in particular small and medium‐sized enterprises and export sectors, via credit controls and moral suasion. Such tools have been out of fashion for many years but, post the financial crisis of 2008, macroprudential policy‐makers are once again looking to this historical period for guidance (Aikman, Bush and Taylor ).…”
Section: Conclusion and Discussionmentioning
confidence: 99%
“… Aikman et al . () use lagged macro factors as controls in local projection OLS regression, which they call factor‐augmented local projections. This method is the local projection counterpart of FAVARs. …”
mentioning
confidence: 99%