Banks, Capital Markets, and the Monetary Transmission Mechanism
AbstractThis paper reviews the recent literature on bank behavior and the transmission process of monetary policy. It examines the implications of asymmetric information for the credit market and the capital market and discusses the macroeconomic significance of these results. In models with imperfect information net worth is found to play a key role in generating macroeconomic fluctuations and in the monetary transmission process. The special characteristics of banks are discussed and also the conditions required for the presence of a distinct credit channel for monetary policy. Empirical evidence on the importance of the new theories is briefly reviewed including an evaluation of the role of capital market imperfections in investment and consumption and the differential impact of monetary policy on small and large firms. The lessons to be drawn from these theoretical and empirical results for the conduct of monetary policy are briefly outlined. Copyright 1994 by Oxford University Press.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Review of Economic Policy.
Volume (Year): 10 (1994)
Issue (Month): 4 (Winter)
Contact details of provider:
Web page: http://oxrep.oupjournals.org/
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.