Credit Shocks in a Monetary Business Cycle
The paper sets out a monetary business cycle model extended to include the production of credit that serves as an alternative to money in transactions and is subject to productivity shocks. The model provides some improvement on certain puzzles, in particular by capturing the procyclic movements of monetary aggregates, inflation and interest rates. And its application to analyse banking episodes indicates that the credit shock helps explain cycle behavior during the US financial deregulation period of the 1980s and 1990s
|Date of creation:||2004|
|Date of revision:|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
Web page: http://www.EconomicDynamics.org/
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