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.

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Year of publication:	2010-01
Authors:	Bijapur, Mohan
Institutions:	London School of Economics (LSE)
Subject:	credit crunch \| monetary policy \| transmission mechanism \| credit channel

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Extent:	application/pdf
Series:	LSE Research Online Documents on Economics.
Type of publication:	Book / Working Paper
Notes:	Published in Economics Letters, January, 2010, 106(1), pp. 42-44. ISSN: 0165-1765
Classification:	E32 - Business Fluctuations; Cycles ; E5 - Monetary Policy, Central Banking and the Supply of Money and Credit ; G21 - Banks; Other Depository Institutions; Mortgages
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011126655