Credit channel and credit shocks in Canadian macrodynamics - a structural VAR approach
The idea that financial structure and output determination may be interrelated has gone through several cycles over the past half a century since its inception at the time of the Great Depression. In its latest reincarnation as the theory of financial acceleration, it considers financial factors as propagation mechanisms for the disturbances originating in the real economy. The agency costs of credit allocation by the financial intermediaries play a central role in this theory. Financial factors have rarely been studied as potential sources of variation in the economy. This article, however, investigates the origination of disturbances from bank credit and allows for the propagation of disturbances within a relatively simple macro-dynamic system that utilizes the Structural Vector Autoregression approach The findings for the Canadian economy provide support for the 'credit view' of the monetary policy transmission mechanism. They also show that bank credit to persons affects real output in the short run, whereas bank credit to businesses does not. In other words, consumers but not the business firms appear to be credit constrained.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 13 (2003)
Issue (Month): 4 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAFE20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAFE20|
When requesting a correction, please mention this item's handle: RePEc:taf:apfiec:v:13:y:2003:i:4:p:267-277. See general 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: (Michael McNulty)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.