The Real Effects of Macroprudential Policy : Evidence from Micro Data

This paper investigates the real effects of macroprudential policy (MaPP) using individual data from 122 countries. The empirical analysis shows that MaPP increases savings and decreases borrowing. These effects are then disaggregated by policy instrument, interest rate and country income level. The effects of MaPP on individual behavior depend to a large extent on the policy instrument and the country income level and to a lesser extent on the interest rate. These findings stand up to a variety of endogeneity tests that include propensity score matching and an instrumental variable approach