ECB paper investigates macro-pru’s impact on inequality
More research is needed on how borrower-based measures affect income inequality, researchers say
A working paper published by the European Central Bank investigates the distributional effects of loan-to-value (LTV) and debt-service-to-income (DSTI) ratios.
In Do macro-prudential measures increase inequality? Evidence from the euro area household survey, Oana-Maria Georgescu and Diego Vila Martin simulate different macroeconomic and macro-prudential scenarios for Ireland, Italy, the Netherlands and Portugal.
They find that borrower-based measures have “a moderate negative welfare impact in
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