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The Monetary Transmission Mechanism

Author

Listed:
  • Alan A. Rabin

    (University of Tennessee, Chattanooga)

  • Leland B. Yeager

    (Auburn University)

Abstract

Several articles have recently questioned the "money view" of the monetary transmission mechanism and have offered an alternative "credit view". We argue that the money view has been incompletely presented in much of the literature and in almost all textbooks on Macroeconomics and Money and Banking. A distinction between the two views is unnecessary if one presents the money view correctly. A change in the money supply can affect income both directly and indirectly through what we call the "cash balance effect", which has other aspects than the wealth aspect that Patinkin emphasizes in discussing his "real-balance effect."

Suggested Citation

  • Alan A. Rabin & Leland B. Yeager, 1997. "The Monetary Transmission Mechanism," Eastern Economic Journal, Eastern Economic Association, vol. 23(3), pages 293-299, Summer.
    • Handle: RePEc:eej:eeconj:v:23:y:1997:i:3:p:293-299
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume23/V23N3P293_299.pdf
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    Citations

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    Cited by:

    1. Mark Ladenson, 2007. "Monetary Theory," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(2), pages 249-254, June.
    2. Simatele, Munacinga C H, 2004. "Financial sector reforms and monetary policy reforms in Zambia," MPRA Paper 21575, University Library of Munich, Germany.

    More about this item

    Keywords

    Credit; Macroeconomics; Monetary; Money Supply; Money; Supply;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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