We augment a standard New Keynesian model with a financial accelerator mechanism and show that financial frictions generate large state-dependent amplification effects. We fit the model to US data and show that, when shocks drive the model far away from the steady state, the nonlinear model...

The research aims to test the impact of financial development on the bank lending channel of monetary policy transmission for the case study of an emerging market characterized by a multiple-tool regime, which has been ignored in previous studies. Given the two-step system generalized moments of...

This paper studies monetary policy transmission in China's peer-to-peer lending market. Using spectral measures of causality, we explore the impacts of Chinese monetary policy shocks on China's P2P market interest rates and lending amounts. The estimation results indicate significant spectral...

We analyze the role of nonbank lenders in the transmission of monetary policy using data on the universe of unsecured credit to firms and households in Denmark. Nonbanks increase their credit supply after a monetary contraction, both relative to banks and in absolute terms. The nonbank credit...