The impact of monetary policy and banks' balance sheets: some international evidence
AbstractThere has been extensive empirical research on the role of credit markets in the transmission of US monetary policy, but the evidence for other countries is scarce. This paper compares the US experience with a set of 13 European countries by examining monetary VARs including banks' balance sheets in the spirit of Bernanke and Blinder (1992). It is shown that the VAR methodology provides plausible results for interpreting interest rate shocks as monetary policy shocks in most countries. The evolution of bank lending after a monetary contraction is then analysed. For most countries, it is shown that bank loans decline more than money in the medium run. In the short run, however, loans are sticky and react less than money. Also, loans and output responses to an increase in interest rate tend to be more synchronized than those of money and output. This evidence is similar to the US and is consistent with the broad credit channel of monetary policy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal Applied Financial Economics.
Volume (Year): 10 (2000)
Issue (Month): 1 ()
Contact details of provider:
Web page: http://www.tandf.co.uk/journals/routledge/09603107.html
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- repec:lan:wpaper:922 is not listed on IDEAS
- Cobham, Alex, 2001. "EMU, Monetary Policy and the Role of Financial Constraints," EIFC - Technology and Finance Working Papers 6, United Nations University, Institute for New Technologies.
- repec:lan:wpaper:935 is not listed on IDEAS
- Diemo Dietrich, 2003. "Monetary Policy Shocks and Heterogeneous Finance Decisions: A Model of Hidden Effort Choice and Financial Intermediation," German Economic Review, Verein für Socialpolitik, vol. 4, pages 365-388, 08.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.