Rural Impacts of Monetary Policy

A multiregional econometric model evaluates the impacts of changes in monetary policy on economic development in metropolitan and nonmetropolitan parts of each of the four principal U S Census regions Regional variations in the adaptation to a change in national monetary policy depend on a specific region's economic structure Nonmetro regions are generally less affected by overall changes in monetary policy than are metro regions Increases in credit to nonmetro regions increase nonmetro economic activity But, the accompanying decrease in metro activity - caused by decreased credit availability - more than offsets the nonmetro gains, and these nonmetro gains tend to dissipate over time