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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
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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
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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
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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
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A Classical View of the Business Cycle
Belongia, Michael - 2020
In the 1920s, Irving Fisher extended his previous work on the Quantity Theory to describe, through an early version of the Phillips Curve, how changes in the money stock could be associated with cyclical movements in output, employment, and inflation. At the same time, Holbrook Working designed...
Persistent link: https://www.econbiz.de/10012839715
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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
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Monetary Policy Effectiveness in China : Evidence from a FAVAR Model
Fernald, John G. - 2014
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
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Bank Market Power and Monetary Policy Transmission : Evidence from a Structural Estimation
Wang, Yifei; Whited, Toni Marion; Wu, Yufeng; Xiao, Kairong - 2021
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
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The Effects of Monetary Policy Shocks : Some Evidence from the Flow of Funds
Christiano, Lawrence J.; Eichenbaum, Martin S.; Evans, … - 2022
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
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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