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The Monetary Transmission Mechanism in Italy: The Credit Channel and a Missing Ring

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  • Riccardo Fiorentini

    ()
    (University of Pavia)

  • Roberto Tamborini

    ()
    (University of Trento)

Abstract

Research on how money affects economic activity has revived interest in the socalled "credit view". In this paper we focus on current developments in the credit view in order to assess the results of the past decade's research and its legacy for macroeconomics and monetary policy. We expound the main models of the "credit channels" of monetary transmission, drawing a distinction between models of aggregate demand, which are predominant, and models of aggregate supply, which are less developed despite theory suggests a potential connection between credit conditions and firms' production activity. Each approach is accompanied by a survey of the main empirical results with particular reference to Italy, where bankfirm relations are traditionally regarded as particularly important.

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Bibliographic Info

Article provided by GDE (Giornale degli Economisti e Annali di Economia), Bocconi University in its journal Giornale degli Economisti e Annali di Economia.

Volume (Year): 60 (2001)
Issue (Month): 1 (June)
Pages: 1-42

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Handle: RePEc:gde:journl:gde_v60_n1_p1-42

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Keywords: monetary policy; credit; Italian economy;

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Cited by:
  1. Lionel Nesta & Flora Bellone & Patrick Musso & Stefano Schiavo, 2008. "Financial Constraints and Firm Export Behavior," Sciences Po publications 16, 2008, Sciences Po.
  2. Giuseppe Arbia & Giuseppe Espa & Diego Giuliani & Andrea Mazzitelli, 2009. "Clusters of firms in space and time," Department of Economics Working Papers 0902, Department of Economics, University of Trento, Italia.
  3. Elisabetta De Antoni, 2008. "Minsky’s Upward Instability: the Not-Too-Keynesian Optimism of a Financial Cassandra," Department of Economics Working Papers 0812, Department of Economics, University of Trento, Italia.
  4. Massimo Caruso, 2006. "Monetary Policy Impulses, Local Output and the Transmission Mechanism," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 65(1), pages 1-30, May.
  5. K. Vela Velupillai, 2004. "The unreasonable ineffectiveness of mathematics in economics," Department of Economics Working Papers 0406, Department of Economics, University of Trento, Italia.
  6. Christopher L. Gilbert & Alexandra Tabova, 2004. "Commodity prices and debt sustainability," Department of Economics Working Papers 0404, Department of Economics, University of Trento, Italia.
  7. Gianluca Grimalda & Lorenzo Sacconi, 2005. "The Constitution of the Not-For-Profit Organisation: Reciprocal Conformity to Morality," Constitutional Political Economy, Springer, vol. 16(3), pages 249-276, 09.
  8. Eugenio Gaiotti & Alessandro Secchi, 2004. "Is there a cost channel of monetary policy transmission? An investigation into the pricing behaviour of 2,000 firms," Temi di discussione (Economic working papers) 525, Bank of Italy, Economic Research and International Relations Area.
  9. Julie Dana & Christopher L. Gilbert, 2008. "Managing Agricultural Price Risk in Developing Countries," Department of Economics Working Papers 0819, Department of Economics, University of Trento, Italia.
  10. Andreozzi, Luciano, 2012. "Property rights and investments: An evolutionary approach," Games and Economic Behavior, Elsevier, vol. 74(1), pages 1-11.
  11. Massimo Caruso, 2004. "Monetary Policy Impulses, Local Output and the Transmission Mechanism," Temi di discussione (Economic working papers) 537, Bank of Italy, Economic Research and International Relations Area.
  12. Lorenzo Sacconi & Stefano Moretti, 2004. "A Fuzzy Logic and Default Reasoning Model of Social Norm and Equilibrium Selection in Games under Unforeseen Contingencies," Department of Economics Working Papers 0412, Department of Economics, University of Trento, Italia.
  13. Lorenzo Sacconi, 2004. "A Social Contract Account for CSR as Extended Model of Corporate Governance (Part II): Compliance, Reputation and Reciprocity," Department of Economics Working Papers 0411, Department of Economics, University of Trento, Italia.
  14. Christopher L. Gilbert, 2008. "Commodity Speculation and Commodity Investment," Department of Economics Working Papers 0820, Department of Economics, University of Trento, Italia.
  15. Sandra Notaro & Alessandro Paletto & Roberta Raffaelli, 2008. "Does forest damage have an economic impact? A case study from the Italian Alps," Department of Economics Working Papers 0809, Department of Economics, University of Trento, Italia.
  16. Christopher L. Gilbert, 2008. "How to Understand High Food Prices," Department of Economics Working Papers 0823, Department of Economics, University of Trento, Italia.
  17. Giuliana Passamani & Roberto Tamborini, 2006. "Monetary policy through the “credit-cost channel”. Italy and Germany," Department of Economics Working Papers 0609, Department of Economics, University of Trento, Italia.

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