Does monetary policy lose effectiveness during a credit crunch?
AbstractThis article investigates the effectiveness of monetary policy during a credit crunch by estimating a vector autoregression on the US economy. We present evidence that interest rate cuts have a diminished impact on growth, due to impairment in the relationship between monetary policy and the supply of intermediated credit.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 106 (2010)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/ecolet
Credit crunch Monetary policy Transmission mechanism Credit channel;
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