The Multi-Regime Bank Lending Channel and the Effectiveness of the Polish Monetary Policy Transmission During Transition
This Paper examines the consequences of interactions between the bank lending channel and the traditional interest rate and exchange rate channels on the effectiveness of the monetary policy transmission in Poland since 1994. First, we develop a small open-economy credit-augmented model. Under two different exchange rate arrangements, namely a fixed rate system with sterilized intervention and a pure floating rate system, we establish that the bank lending channel can generate several regimes in the transmission of monetary policy shocks. In essence, it may not only amplify, as usually considered in the literature, but it may also attenuate the impact of monetary policy on output, prices and the real exchange rate as compared to the standard effects of both the interest rate and the exchange rate channels. The variations in the interest rate spread between the loan rate and the central bank's intervention rate are found to be a good indicator of amplification and attenuation regimes, provided that there is a positive relationship between both rates. Second, we find an attenuation bank lending channel regime from the beginning of 1996 to the end of 1998, and on average a neutral effect of the bank lending channel since then.
|Date of creation:||Nov 2002|
|Date of revision:|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bernanke, Ben S & Blinder, Alan S, 1988.
"Credit, Money, and Aggregate Demand,"
American Economic Review,
American Economic Association, vol. 78(2), pages 435-39, May.
- Ghatak, Subrata & Mulhern, Alan & Stewart, Chris, 2003. "Determinants of intended expansion of Polish small firms," Journal of Policy Modeling, Elsevier, vol. 25(3), pages 287-296, April.
- Ben S. Bernanke & Mark Gertler, 1995.
"Inside the Black Box: The Credit Channel of Monetary Policy Transmission,"
NBER Working Papers
5146, National Bureau of Economic Research, Inc.
- Ben S. Bernanke & Mark Gertler, 1995. "Inside the Black Box: The Credit Channel of Monetary Policy Transmission," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 27-48, Fall.
- Bernanke, Ben & Gertler, Mark, 1995. "Inside the Black Box: The Credit Channel of Monetary Policy Transmission," Working Papers 95-15, C.V. Starr Center for Applied Economics, New York University.
- Michel Aglietta & Camille Baulant & Virginie Coudert, 1998.
"Compétitivité et régime de change en Europe Centrale,"
1998-10, CEPII research center.
- Michel Aglietta & Virginie Coudert & Camille Baulant, 1999. "Compétitivité et régime de change en Europe centrale," Revue Économique, Programme National Persée, vol. 50(6), pages 1221-1236.
- Dibooglu, Selahattin & Kutan, Ali M., 2001. "Sources of inflation and output fluctuations in Poland and Hungary: Implications for full membership in the European Union," ZEI Working Papers B 16-2001, University of Bonn, ZEI - Center for European Integration Studies.
- Claudia Buch, 2001. "Money demand in Hungary and Poland," Applied Economics, Taylor & Francis Journals, vol. 33(8), pages 989-999.
- Gottschalk, Jan & Moore, David, 2001. "Implementing Inflation Targeting Regimes: The Case of Poland," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 24-39, March.
- Michel Aglietta & Camille Baulant & Sandra Moatti, 2003. "Exchange Rate Management in Central Europe and the Debate on Exchange Rate Regimes," Revue économique, Presses de Sciences-Po, vol. 54(5), pages 961-982.
- Dornbusch, Rudiger, 1976. "Expectations and Exchange Rate Dynamics," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1161-76, December.
- Dale, Spencer & Haldane, Andrew G, 1998.
"Interest Rate Control in a Model of Monetary Policy,"
The Manchester School of Economic & Social Studies,
University of Manchester, vol. 66(3), pages 354-75, June.
- Spencer Dale & Andrew Haldane, 1993. "Interest rate control in a model of monetary policy," Bank of England working papers 17, Bank of England.
- Anil K. Kashyap & Jeremy C. Stein & David W. Wilcox, 1991.
"Monetary policy and credit conditions: evidence from the composition of external finance,"
Finance and Economics Discussion Series
154, Board of Governors of the Federal Reserve System (U.S.).
- Kashyap, Anil K & Stein, Jeremy C & Wilcox, David W, 1993. "Monetary Policy and Credit Conditions: Evidence from the Composition of External Finance," American Economic Review, American Economic Association, vol. 83(1), pages 78-98, March.
- Anil K Kashyap & Jeremy C. Stein & David W. Wilcox, 1992. "Monetary Policy and Credit Conditions: Evidence From the Composition of External Finance," NBER Working Papers 4015, National Bureau of Economic Research, Inc.
- Jacob A. Frenkel & Carlos A. Rodriguez, 1982. "Exchange Rate Dynamics and the Overshooting Hypothesis," NBER Working Papers 0832, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:3624. 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: ()
If references are entirely missing, you can add them using this form.