The policy model described in the article aims to analyze how different policies can affect the Canadian economy by looking at the balance sheets of households, firms, and banks. By incorporating real-financial linkages and macroprudential policies, the model can help understand the impact of house price changes on banks' capital positions and the broader economy. The researchers built a model that shows how changes in asset prices can influence bank lending rates and overall financial stability. They found that an increase in house prices can lead to better funding conditions for banks, allowing them to lend to entrepreneurs and households at lower rates. This model can be used to explore different policy scenarios to promote economic and financial stability in Canada.