Iagarashi, Yoske; Liu, Keqing - 2022
-flavored” monetary policy can reduce financial propagation by affecting bank shadow values, while countercyclical capital regulation is … macroprudential policy prescriptions. We build a New Keynesian model with banks that channel funds from households to firms. Banks … that in the decentralized equilibrium, banks borrow more than the socially efficient level. A macroprudential policy that …