Effectiveness and conduct of macroprudential policy in Indonesia in 2003–2020: Evidence from the structural VAR models
Marek A. Dąbrowski,
Dimas Mukhlas Widiantoro
Abstract:The paper examines the effectiveness of macroprudential policy in Indonesia and policy reactions to economic developments. Using the structural vector autoregression and data on the regulatory LTV ratio, we investigate the policy effectiveness in controlling credit growth and real property prices along with the effects on economic activity. We find that the LTV-based policy in Indonesia is effective in taming credit growth in the medium run. It, however, is not the case with real property prices whose response… Show more
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