The effects of earmarked credit on the smoothing of financial shocks and on the decisions of monetary and macroprudential policies

Author(s)

Matheus Rocha Rosignoli

• Document type: Master's Dissertation
• Press: São Paulo.
• Institution: Universidade de São Paulo (USP). Faculdade de Economia, Administração e Contabilidade (FEA/SBD)
• Defense date: 2015-10-30

Examining board members

Márcio Issao Nakane; Marcos Ribeiro de Castro; Fabio Kanczuk

• Advisor: Márcio Issao Nakane

Abstract

This paper uses a DSGE model with financial frictions to analyze the consequences of the existence of a subsidized credit line for the recovery of the economy against shocks. The results indicate that the subsidized credit helps to mitigate the effects of shocks that are specifically related to the credit market, as in the case of financial shocks or macroprudential policy shocks. The responses of the main variables of the economy to these shocks become shorter and less intense. In the case of monetary policy shock, however, the presence of subsidized credit does not change significantly the responses of real variables, such as consumption and investment. (AU)

• FAPESP's process: 13/19468-2 - The effects of subsidized loans on the macroprudential and monetary policies
• Grantee: Matheus Rocha Rosignoli
• Support Opportunities: Scholarships in Brazil - Master