Positive Cross-border Policy Spillovers?

Ever wonder if contagion can ever be a good thing? In the paper “Friend or Foe: Cross-Border Links, Contagious Banking Crises, and Joint Use of Macroprudential Policies,” Laura Kodres, associate with the GCFP and former Distinguished Senior Fellow, along with co-authors Seung Mo Choi and Jing Lu, find that macroprudential policies employed by a country that is closely-linked to others can have positive spillover effects–lowering the chances of a banking crisis even among countries that do not implement similar policies. Read the full paper here, published in the Journal of Financial Services Research.