Monetary Policy and Credit Conditions: Evidence from the Composition of External Finance
AbstractIn this paper, the authors use the relative moments in bank loans and commercial paper to provide evidence on the existe nce of a loan-supply channel of monetary-policy transmission. The author s find that tighter monetary policy leads to a shift in firms' mix of external financing: commercial paper issuance rises while bank loans fall. This suggests that contractionary policy can indeed reduce lo an supply. Furthermore, such shifts in loan supply seem to affect investment, even controlling for interest rates and output. Copyright 1993 by American Economic Association.
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Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Review.
Volume (Year): 83 (1993)
Issue (Month): 1 (March)
Other versions of this item:
- Anil K Kashyap & Jeremy C. Stein & David W. Wilcox, 1992. "Monetary Policy and Credit Conditions: Evidence From the Composition of External Finance," NBER Working Papers 4015, National Bureau of Economic Research, Inc.
- Anil K. Kashyap & Jeremy C. Stein & David W. Wilcox, 1991. "Monetary policy and credit conditions: evidence from the composition of external finance," Finance and Economics Discussion Series 154, Board of Governors of the Federal Reserve System (U.S.).
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