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Bank credit in the transmission of monetary policy: A critical review of the issues and evidence

Listed author(s):
  • Smant, David / D.J.C.

The "credit view" emphasizes the impact of monetary policy on the amount and conditions of credit supplied by the banking sector as a main transmission channel. A review of the literature shows that the view that banks are in some sense special is widely accepted. However, whether the bank credit channel is an important part of the aggregate monetary transmission remains questionable. There is no evidence for credit rationing, at least not at the macroeconomic level. Many of the empirical results on the credit channel have alternative interpretations. Much of the debate on a bank credit channel appears to deal with effects of second-order importance.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 19816.

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Date of creation: 31 Mar 2002
Handle: RePEc:pra:mprapa:19816
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