Prof. Anusha Chari of the University of North Carolina on shocks and capital flows in emerging markets
Scientific Sense ®
00:00
Is It Correct to Think About It This Way, Sir?
When you really find tune thangs, you lose flexibility, lose oftionality, become very rigid. It might be that this policy, mato prudential policy, is work in good times, but it actually makes a system very rigid. And what we find is that the more generalized buffers, which are these counter cyclical capital buffers, right? Where you save during good times,. Youre kind of building these cyclical, counter syclical buffers in good times that can be used in bad times. So they have precisely that flexibility that you were talking about and so on.
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