Joint impact of monetary and macroprudential policies on output in Vietnam: Evidence from the bank credit channel and state-dependent analysis

This study examines the joint impact of monetary and macroprudential policies on economic output in Vietnam. The research provides evidence from the bank credit channel, revealing a significant non-linear relationship between bank credit and economic output. The role of macroprudential policy in this nonlinear nexus is state-dependent. During severe economic downturns, it lessens the severity of the downturn of the inverted U-shaped relationship. Conversely, during strong expansions, macroprudential policy can sharpen the downturn of this relationship. The study offers novel empirical insights into the state-dependent and opposing effects of policy interactions at economic extremes, highlighting implications for sustainable growth. Paper type : Research paper