Title: The impact of macroprudential policies on industrial growth

Abstract:

This paper analyses the causal impact of macroprudential policies on growth, using industry-level data for 89 countries for the period 1990 to 2021. The small industry size creates an exogenous identification and avoids reverse-causality. I find that macroprudential tightening measures have a negative impact on manufacturing growth, but only for industries with high external finance dependence. This effect is stronger during banking crises, periods of higher output growth and for advanced economies. The effect is weaker during period of high private credit growth. Growth effects on externally dependent industries are economically sizeable and can persist over three years.

Bio:

Carlos Madeira is a visiting economist at the BIS as representative of the Central Bank of Chile. At the Central Bank of Chile since 2009, Carlos coordinated the Household Finance (EFH) team until 2014 and published research on household finance, expectations and monetary policy disagreement. Carlos holds a PhD in economics from Northwestern University and a BA from Nova School of Business and Economics (Portugal).