Bank Lending Channel and the Monetary Transmission Mechanism: the Case of Chile
AbstractThis paper analyses the evidence about the bank-lending channel in Chile during the period 1990- 2002 using data from both the banking sector and the corporate sector. First, we estimate a panel data of banks to identify shifts in the loan supply curve in response to changes in monetary policy. Second, taking into consideration the evidence gathered in the previous step, we construct an aggregate variable aimed to capture the main forces behind the bank lending channel, and we estimate a VAR system to test whether or not this channel exacerbates the effect of a monetary policy shock over macroeconomic activity. We conclude that the bank-lending channel has operated as a monetary policy transmission mechanism in Chile during the sample period, having an independent and significant effect in terms of macroeconomic activity.
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Bibliographic InfoPaper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 223.
Date of creation: Aug 2003
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-09-08 (All new papers)
- NEP-LAM-2003-09-08 (Central & South America)
- NEP-MAC-2003-09-08 (Macroeconomics)
- NEP-MFD-2003-09-08 (Microfinance)
- NEP-MON-2003-09-08 (Monetary Economics)
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- Mariya Gubareva & Maria Rosa Borges, 2013. "Typological Classification, Diagnostics, and Measurement of Flights-to-Quality," Working Papers 2013/15, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon..
- Xiong , Qiyue, 2013. "The role of the bank lending channel and impacts of stricter capital requirements on the Chinese banking industry," BOFIT Discussion Papers 7/2013, Bank of Finland, Institute for Economies in Transition.
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