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Monetary, Credit and (Other) Transmission Processes: A Monetarist Perspective

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  • Allan H. Meltzer

Abstract

Monetarist analysis of the transmission process highlights the response of relative prices and real wealth to monetary (and other) impulses. Monetary impulses are neutral in the long run. Short-run nonneutrality reflects uncertainty, incomplete information about the persistence and nature of impulses, fixed contracts, and other institutional detail. Patterns of change in relative prices have some common features but they also differ from cycle to cycle and by countries. This paper compares the monetarist analysis of intermediation to the lending view and presents evidence on the role of relative prices, lending, and other types of intermediation.

Suggested Citation

  • Allan H. Meltzer, 1995. "Monetary, Credit and (Other) Transmission Processes: A Monetarist Perspective," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 49-72, Fall.
    • Handle: RePEc:aea:jecper:v:9:y:1995:i:4:p:49-72
    Note: DOI: 10.1257/jep.9.4.49
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    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General

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