| Abstract [eng] |
In the 2000’s excessive credit and asset price growth led to a global economic boom that was later followed by the biggest financial crisis since the Great Depression. The prelude and nature of the Global Financial Crisis revealed that banking sector can amplify economic cycles, and that banking regulation had been too micro-oriented. In response to this, a new type of policy emerged, which aims to mitigate systemic risk and increase the resilience of the financial industry and real economy. Macroprudential policy is in place in Lithuania for more than a decade, yet it is not well understood, as there are only a few academic studies on the topic. The aim of this dissertation is to assess the impact of macroprudential policy on the economy of Lithuania by building general equilibrium models. The developed models in the dissertation reveal that the tightening of policy measures may slightly increase interest rates and decrease lending, however, the impact on the general economy is quite small. Although the tightening of policy measures that are aimed to reduce indebtedness may decrease the speed of economic convergence in the long run, macroprudential policy should also reduce the volatility of Lithuania’s economy. |
