We explore the interaction of monetary and macroprudential policy in a simple agent-based model of the housing market. Our model shows that the impact of monetary policy on housing market dynamics is smaller than the impact of macroprudential regulation. While both maximum loan-to-value ratios...

An accommodating monetary policy followed by a sudden increase of the short term interest rate often leads to a bubble burst and to an economic slowdown. Two examples are the Great Depression of 1929 and the Great Recession of 2008. Through the implementation of an Agent Based Model with a...

An accommodating monetary policy followed by a sudden increase of the short term interest rate often leads to a bubble burst and to an economic slowdown. Two examples are the Great Depression of 1929 and the Great Recession of 2008. Through the implementation of an Agent Based Model with a...

This paper explores how different credit market and banking regulations affect business fluctuations. Capital adequacy and reserve requirements are analysed for their effect on the risk of severe downturns. We develop an agent-based macroeconomic model in which financial contagion is transmitted...