Wing Thye Woo made an analogy comparing the race between asset based reserve requirements (ABRR) and counter-cyclical capital buffer (CCB) to that between a horse and a donkey. The horse is normally faster than a donkey, but if the horse has to climb a hill and the donkey does not, then it is not clear that the horse will reach its destination faster. His point is whether there are cases in which CCB is the better instrument. He cites the Poole article, which finds that deciding whether fixing the interest rate or the money supply is better depends on the nature of the shock that hits an economy, to ask whether there are any circumstances under which CCB would be a winner.
Bhanupong Nidhiprabha points to the Lucas critique in his discussion of the paper, which states that a structural change cannot be accounted for by merely changing parameter values...