Van den Heuvel, Skander J. - Pennsylvania State University <University Park, Pa.> / … - 2002
Traditional monetary theory has largely ignored the role ofbank equity. Bank-centered accounts of how monetarypolicy … deposits and, in the case of the bank lendingchannel, bank loans. As Friedman (1991) observed,“Traditionally, most economists … Research on this andother episodes has found that low bank capital is associatedwith sluggish lending. …
