Macroprudential policies and private domestic investment in developing countries: an instrumental variables approach
Bambe, Bao-We-Wal (2025)
Discussion Paper 3/2025
Using a panel of 87 developing countries from 2000 to 2017 and applying the instrumental variables strategy, we find that the tightening of macroprudential policies significantly reduces private domestic investment, via a reduction in credit supply and financial inclusion.