In a standard IS-LM model the effects of monetary policy on real activity come through the demand for money and the (unique) interest rate. Actually, under imperfect substitution among financial instruments, shocks of monetary policy will affect the relative structure of interest rates. In this...

In the last decade, a renewed debate on the monetary transmission mechanism has emerged. Recent empirical works analyse the response of financial and real variables to shifts in monetary policy and interpret its implication for the nature of the monetary transmission mechanism. Both, money and...

In the last years, Hungary recorded huge current deficits. These results may endanger the capacity of repayment of the outstanding debt and thus its access to international financial markets. We analyze how domestic credit market conditions have affected the current account performance....

In this paper the corporate investment decision under financial restrictions is investigated with Belgian firm data from 1984 to 1992. An investment Euler equation is derived from a dynamic optimization model with debt ceilings and an elastic credit supply. The model is estimated by GMM for...