Yaprak Tavman - 'Fiscal Consequences of Unconventional Monetary and Credit Policies’

Date: Wednesday 16 January 2019
Time: 18:00 -19:30
Speaker: Yaprak Tavman
Talk Title: 'Fiscal Consequences of Unconventional Monetary and Credit Policies’
Location: Ramsden Room, St Catharine's College

The seminar series is supported by the Cambridge Journal of Economics and the Economics and Policy Group at the Cambridge Judge Business School.

Speaker
Yaprak Tavman is a Lecturer in Economics at the New College of the Humanities (NCH) London. Before joining NCH, Yaprak Tavman worked as a Lecturer in Economics at Newcastle University for 2 years. She has obtained her PhD in Economics from the University of York, where she has also worked as a Teaching Fellow. She has completed her MSc in Economics and Finance with distinction at the University of York and was a Jean Monnet Scholar during her postgraduate studies. Prior to her teaching career, Yaprak Tavrman had worked as a specialist at HSBC Bank plc, and following her graduation from Middle East Technical University, Turkey. 

Her main area of research is macroeconomics, with specialisations in financial markets and the macroeconomy, macroprudential regulation and financial stability, central bank policies, and political economy of finance. She has recently published her article titled ''A Comparative Analysis of Macroprudential Policies'' in Oxford Economic Papers.

Talk Overview
The severity of the 2008-09 global financial crisis forced policy-makers, particularly in advanced economies, to adopt a range of unconventional monetary and credit policies. Although the effectiveness of such policies in stabilizing the economy has been extensively studied, there is as yet no systematic analysis of the real costs of enacting unconventional measures. In this paper, utilizing a New Keynesian general equilibrium model with financial frictions and distortionary taxation, we provide a comparative cost-benefit analysis of two such policies; credit easing and bank capital injections. We note that the use of bank capital injections has a greater stabilizing effect on the economy, at the expense of higher costs. We also show that evaluation of unconventional policy based on lump-sum taxes overstates the benefits of policy interventions. However, our results reveal that both credit policies are welfare improving even with distortionary taxes. Bank capital injections generate higher welfare gains, under both lump-sum and variable tax rates.