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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
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
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
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
changes in credit conditions, such as shocks to M2 or lending levels, do not once other policy variables are taken into …
Persistent link: https://www.econbiz.de/10013046611
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
We study the impacts of the 2009 monetary stimulus and its interaction with infrastructure spending on credit … allocation. We develop a two-stage estimation approach and apply it to China's loan-level data that covers all sectors in the … economy. We find that except for the manufacturing sector, monetary stimulus itself did not favor SOEs over non-SOEs in credit …
Persistent link: https://www.econbiz.de/10013289458
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
This paper uses the Flow of Funds accounts to assess the impact of a monetary policy shock on the borrowing and lending activities of different sectors of the economy. Our measures of contractionary monetary policy shocks have the following properties: (i) they are associated with a fall in...
Persistent link: https://www.econbiz.de/10013322315
We quantify the impact of bank market power on monetary policy transmission through banks to borrowers. We estimate a dynamic banking model in which monetary policy affects imperfectly competitive banks’ funding costs. Banks optimize the pass-through of these costs to borrowers and depositors,...
Persistent link: https://www.econbiz.de/10013310245