Does macroprudential policy affect wealth inequality? Evidence from synthetic controls

This paper examines the effects of macroprudential policy (MaPP) on wealth inequality using a large dataset of 171 countries. I find that, after the adoption of MaPP, wealth concentration in the treated countries increases by 3.4 percentage points in a decade. This finding is explained by a rise in...

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Bibliographic Details
Published in:	Journal of financial stability Vol. 67; p. 101135
Main Author:	Teixeira, André
Format:	Journal Article
Language:	English
Published:	Elsevier B.V 01-08-2023
Subjects:	Bank regulation Inequality Macroprudential policy Synthetic controls Wealth Synthetic controls Macroprudential policy Bank regulation E52 O47 E21 E58 G28 Inequality Wealth
Online Access:	Get full text
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Summary:	This paper examines the effects of macroprudential policy (MaPP) on wealth inequality using a large dataset of 171 countries. I find that, after the adoption of MaPP, wealth concentration in the treated countries increases by 3.4 percentage points in a decade. This finding is explained by a rise in the wealth share of the top 1% combined with a sharp decline in the wealth share of the bottom 50%. These effects are stronger for prudential rules based on income, particularly in advanced economies.
ISSN:	1572-3089 1878-0962
DOI:	10.1016/j.jfs.2023.101135