Ever since the Great Financial Crisis, if not before, it has become clear that there are complex interactions between the real and nominal sectors of the economy. When do monetary and financial policy goals conflict with each other? When is monetary policy a complement to or a substitute for...

Using micro-level data for the U.S., we provide new evidence-at national and state levels - of a positive (negative) relationship between the standard deviation (coefficient of variation) and the average in bank lending-rate markups. In a quantitative theory consistent with these empirical...

This paper offers a comprehensive comparison of the structure of banking and financial markets in the euro area. Based on this, several hypotheses about the role of banks in monetary policy transmission are developed. Many of the predictions that have been proposed for the U.S. are deemed...

Credit spreads rise after a monetary policy tightening, yet spread reactions are heterogeneous across firms. Exploiting information from a panel of corporate bonds matched with balance sheet data for U.S. non-financial firms, we document that firms with high leverage experience a more pronounced...

In the financial accelerator literature pioneered by Bernanke, Gertler and Gilchrist (1999) entrepreneurs are myopic and loans have a fixed rate of return by assumption. We relax both of these assumptions and derive the optimal lending contract for forward looking entrepreneurs who can choose a...

This paper postulates that loan contract characteristics, such as maturity of loans and period of rate fixation, play a major role in shaping how swiftly lending rates react to monetary shocks and for explaining diverging speed of transmission of monetary policy across euro area countries. This...

In this paper, the empirical relevance of the credit channel for the explanation of monetary policy transmission in Germany during the period of monetary targeting from 1975 to 1998 is analyzed. While existing studies of the credit channel rely mostly on the analysis of monetary policy effects...

This paper postulates that loan contract characteristics, such as maturity of loans and period of rate fixation, play a major role in shaping how swiftly lending rates react to monetary shocks and for explaining diverging speed of transmission of monetary policy across Euro area countries. This...