Lending relationships and monetary policy

Arbeitspapier

Financial intermediation and bank spreads are important elements in the analysis of business cycle transmission and monetary policy. We present a simple framework that introduces lending relationships, a relevant feature of financial intermediation that has been so far neglected in the monetary economics literature, into a dynamic stochastic general equilibrium model with staggered prices and cost channels. Our main findings are: (i) banking spreads move countercyclically generating amplified output responses, (ii) spread movements are important for monetary policy making even when a standard Taylor rule is employed (iii) modifying the policy rule to include a banking spread adjustment improves stabilization of shocks and increases welfare when compared to rules that only respond to output gap and inflation, and finally (iv) the presence of strong lending relationships in the banking sector can lead to indeterminacy of equilibrium forcing the central bank to react to spread movements.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Paper ; No. 2009:18

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Financial Markets and the Macroeconomy ; Monetary Policy ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages
• Thema: Endogenous Banking Spread ; Credit Markets ; Cost Channel of Monetary Transmission ; Firm-bank Relationships ; Geldpolitik ; Kreditmarkt ; Zinsstruktur ; Taylor-Regel ; Geldpolitische Transmission ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Aksoy, Yunus ; Basso, Henrique S. ; Coto-Martinez, Javier
• Ereignis: Veröffentlichung
• (wer): Uppsala University, Department of Economics
• (wo): Uppsala
• (wann): 2009

Weitere Informationen

• Handle: http://hdl.handle.net/10419/82560
• URN: urn:nbn:se:uu:diva-112801
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ