Carvalho, Fabia A. de; Castro, Marcos R.; Costa, Silvio … - Bank for International Settlements (BIS) - 2014
This paper investigates the transmission channel of macroprudential instruments in a closed economy DSGE model with a rich set of nancial frictions. Banks' decisions on risky retail loan concessions are based on borrowers' capacity to settle their debt with labor income. We also introduce...