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- W2186782146 abstract "We analyze the macroeconomic eects of changes in legal reserve requirements and the relationship between reserve requirement policy and monetary policy in four Latin American countries (Argentina, Brazil, Colombia, and Uruguay). To correctly identify innovations in reserve requirements, we develop a narrative approach -based on contem- poraneous reports from the IMF and Central Banks -that classi…es changes in reserve requirements into endogenous or exogenous to the business cycle. We show that this dis- tinction is critical in understanding the eects of reserve requirements. In particular, we show that output falls in response to exogenous changes in reserve requirements but would increase in response to all changes due to misidenti…cation. We also show that, when properly identi…ed, reserve requirement policy acts as a substitute for monetary policy rather than a complement. For instance, in bad times reserve requirements are lowered to stimulate output while interest rates need to increase to prevent the domestic currency from rapid depreciation." @default.
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- W2186782146 date "2012-01-01" @default.
- W2186782146 modified "2023-09-24" @default.
- W2186782146 title "Eects and role of macroprudential policy: Evidence from reserve requirements based on a narrative approach" @default.
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