Does monetary policy lose effectiveness during a credit crunch?
This article investigates the effectiveness of monetary policy during a credit crunch by estimating a vector autoregression on the US economy. We present evidence that interest rate cuts have a diminished impact on growth, due to impairment in the relationship between monetary policy and the supply of intermediated credit.
Year of publication: |
2010
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Authors: | Bijapur, Mohan |
Published in: |
Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 106.2010, 1, p. 42-44
|
Publisher: |
Elsevier |
Keywords: | Credit crunch Monetary policy Transmission mechanism Credit channel |
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