The global financial crisis has had a profound impact on output and productivity in advanced and emerging economies. In response, policymakers around the world have acted boldly with monetary policy, macro-prudential policy and regulation.

Is productivity being held back by financial factors - such as the lack of long term finance for long term investment - or is productivity being held back by real economy factors, such as globalisation and demographics? The recent crisis has also spurred a reassessment of the relationship between the level (and type) of finance and growth. Could weak productivity growth owe in part to wasteful investment spending or an undersupply of financial services? How does the mix of early and late stage financing drive investment and productivity? This conference aims to bring together perspectives on these big questions, as they will provide important guidance for future policy actions.


The course will consider alternative macroeconomic frameworks with financial frictions to under-stand financial crisis, business cycles and public policy. There will be an brief historical overview of financial crises and basic financial accelerator models which emphasizes the interaction between borrowing constraint, asset price and aggregate production.

It will then be introduced liquidity constraint to examine the business cycles and monetary policy. Finally, the course will present financial intermediaries and government to study banking crisis, credit policy and macro prudential policy. By developing these frameworks, the training aims to understand the recent financial crisis and the roles of public policies.

Eugenio Cerutti, Stijn Claessens, Luc Laeven, 10 February 2016

Macroprudential policies are meant to reduce procyclicality in financial markets and associated systemic risks. However, empirical evidence on which policies are most effective is still preliminary and inconclusive. This column documents the use of macroprudential policies by a large set of countries over an extended period, and covering many instruments. It shows which policies are most effective in reducing the growth rates of overall credit and household and corporate sector credit, and explores differences across countries, degrees of avoidance, and whether policies work better during booms or busts. 

Piotr Danisewicz, Dennis Reinhardt, Rhiannon Sowerbutts, 05 March 2015

In a global financial system, macroprudential policies may create international spillovers. This column presents new evidence on how the organisational structure of a bank affects the magnitude of these spillovers. An increase in capital requirements at home causes foreign branches to reduce their lending growth to other banks operating in the UK more than foreign subsidiaries do. Seemingly, this is because branches are an integral part of the parent company.

Barry Eichengreen, Poonam Gupta, 19 December 2013

Fed tapering has started. A revival of last summer’s emerging economy turmoil is a real concern. This column discusses new research into who was hit and why by the June 2013 taper-talk shock. Those hit hardest had relatively large and liquid financial markets, and had allowed large rises in their currency values and their trade deficits. Good macro fundamentals did not provide much insulation, nor did capital controls. The best insulation came from macroprudential policies that limited exchange rate appreciation and trade deficit widening in response to foreign capital inflows.

Hans Gersbach, 12 October 2011

The way in which monetary policy, macroprudential policy, and microprudential regulation of banks should be organised and conducted is a major, as yet unresolved, issue. In CEPR Policy Insight No.58, the author outlines a policy framework for addressing this issue.

Enrico Perotti, Lev Ratnovski, Razvan Vlahu, 26 August 2011

As leading economists in Jackson Hole and Lindau call for more and better regulation to avoid a repeat global crisis, this column argues that higher bank capital, while essential, will be no panacea. In particular, it shows that tail risk often goes unaddressed. Regulators should therefore adopt direct tools for dealing with tail risk, including limits on asset and liability-side risk exposures.

Mario Quagliariello, Massimo Libertucci, 24 February 2010

How much “freedom” should policymakers have? This column discusses to what extent the experience gained from monetary policy can help to define how macroprudential policy should be implemented.