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Inside the Black Box : The Credit Channel of Monetary Policy Transmission

Bernanke, Ben; Gertler, Mark - 2022

The 'credit channel' theory of monetary policy transmission holds that informational frictions in credit markets worsen … components to monetary policy shocks and describe how the credit channel helps explain the facts. We discuss two main components … credit aggregates are not valid tests of this theory …

Persistent link: https://www.econbiz.de/10014158794

Economic Policy Uncertainty and the Credit Channel : Aggregate and Bank Level U.S. Evidence Over Several Decades

Bordo, Michael D. - 2016

first examine the impact of economic policy uncertainty on aggregate bank credit growth. Then we analyze commercial bank … macroeconomic controls, economic policy uncertainty affected bank level credit growth, and (ii) whether there is variation in the … on bank credit growth. Since this impact varies meaningfully with some bank characteristics – particularly the overall …

Persistent link: https://www.econbiz.de/10012997906

Monetary Policy Through Production Networks : Evidence from the Stock Market

Ozdagli, Ali - 2017

Monetary policy shocks have a large impact on stock returns in narrow windows around press releases by the Federal Reserve. We use spatial autoregressions to decompose the overall effect of monetary policy shocks into a direct effect and an indirect (network) effect. We attribute 50%-85% of the...

Persistent link: https://www.econbiz.de/10012955942

Measuring Monetary Policy

Bernanke, Ben; Mihov, Ilian - 2021

Extending the approach of Bernanke and Blinder (1992), Strongin (1992), and Christiano, Eichenbaum, and Evans (1994a, 1994b), we develop and apply a VAR-based methodology for measuring the stance of monetary policy. More specifically, we develop a 'semi-structural' VAR approach, which extracts...

Persistent link: https://www.econbiz.de/10013218416

Banks' Exposure to Interest Rate Risk and the Transmission of Monetary Policy

Landier, Augustin - 2013

We show empirically that banks' exposure to interest rate risk, or income gap, plays a crucial role in monetary policy transmission. In a first step, we show that banks typically retain a large exposure to interest rates that can be predicted with income gap. Secondly, we show that income gap...

Persistent link: https://www.econbiz.de/10013085912

Monetary Policy Surprises, Credit Costs and Economic Activity

Gertler, Mark - 2014

that lead to "large" movements in credit costs and economic activity. The large movements in credit costs are mainly due to … the reaction of both term premia and credit spreads that are typically absent from the standard model of monetary policy …

Persistent link: https://www.econbiz.de/10013052498

Putting 'M' Back in Monetary Policy

Leeper, Eric M.; Roush, Jennifer E. - 2021

Money demand and the stock of money have all but disappeared from monetary policy analyses. This paper is an empirical contribution to the debate over the role of money in monetary policy analysis. The paper models supply and demand interactions in the money market and finds evidence of an...

Persistent link: https://www.econbiz.de/10013248229

Money Growth and Interest Rates

Hur, Seok-kyun - 2021

Our paper explores a transmission mechanism of monetary policy through bond market. Based on the assumption of delayed responses of economic agents to monetary shocks, we derive a system of equations relating the term structure of interest rates with the past history of money growth rates and...

Persistent link: https://www.econbiz.de/10013230219

Analysis of the Monetary Transmission Mechanism : Methodological Issues

McCallum, Bennett T. - 2021

This paper argues that, in studying the monetary policy transmission process, more emphasis should be given to the systematic portion of policy behavior and correspondingly less to random shocks basically because shocks account for a very small fraction of policy-instrument variability. Analysis...

Persistent link: https://www.econbiz.de/10013212576

The Deposits Channel of Monetary Policy

Drechsler, Itamar - 2016

We present a new channel for the transmission of monetary policy, the deposits channel. We show that when the Fed funds rate rises, banks widen the spreads they charge on deposits, and deposits flow out of the banking system. We present a model where this is due to market power in deposit...

Persistent link: https://www.econbiz.de/10012994893