Research On Macroprudential Policy Tools For Cross-border Capital Flows Under The Two-pillar Framework

Cross-border capital flows have pro-cyclical characteristics.Under certain conditions,the surge of capital inflows can easily trigger the positive circulation mechanism of domestic investment overheating and asset price inflation,which is an important reason for triggering a country’s systemic financial risks.The practical experience of various countries has shown that the traditional monetary policy has obvious shortcomings during the financial crisis.Capital control measures are effective to a certain extent,but there are drawbacks such as the loss of efficiency in resource allocation.The use of macro-prudential policy tools for cross-border capital flows to maintain economic stability has become the consensus of the monetary authorities of various countries.This paper constructs a DSGE model that includes cross-border capital flows under open economic conditions.The model introduces cross-border financing leverage ratios as macro-prudential policy quantitative tools and tobin tax as price tools.By using variable response analysis and social welfare loss analysis,this paper systematically compares the impacts of different types of capital flows and the differences in the adjustment and regulation effects of different policy tool combinations under different degrees of capital account openness.This paper provides a certain operational level support for the monetary authorities in the choice and application of macro-prudential policy tools for cross-border capital flows.The research results of this paper show that:first,cross-border capital flows will cause procyclical fluctuations in the financial market and the real economy;compared to implementing monetary policy alone,the two-pillar framework is more advantageous.Second,macro-prudential policy quantitative tools and price tools for cross-border capital flows have different comparative advantages,and there are significant differences in their control effects on different types of capital flow shocks.Quantitative tools are powerful,and their control effects are significant under the impact of external capital flows caused by large domestic and foreign interest rates;price-based instruments are more transparent and moderate,and are suitable for the impact of endogenous capital flows caused by the tightening of domestic credit.The policy objective is to guide capital flow to the domestic real economy.Third,under the openness of medium and high capital accounts,different macro-prudential policy quantitative tools for cross-border capital flows can effectively alleviate economic fluctuations,and the application of the optimal policy tool combination remains unchanged.Accordingly,this article proposes the following policy recommendations:explore the implementation of the Tobin tax and enrich the toolbox of macro-prudential policies for cross-border capital flows;improve the coordination and matching mechanism of monetary policy and macro-prudential policies;strengthen the monitoring and early warning of cross-border capital flows,and timely identify the source of external shocks;prudently advance the process of opening this account.