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Bank Lending Channel of Monetary Policy: Evidence for Colombia, Using a Firms´ Panel

Jose Eduardo Gomez-Gonzalez () and Adriana Paola Morales Acevedo ()

Borradores de Economia from Banco de la Republica de Colombia

Abstract: In this paper we find empirical evidence of bank lending channel for Colombia, using a balanced panel data of about four thousand non-financial firms. We find that increases in the interest rate, proxiing for the monetary policy instrument, lead to a reduction in the proportion of bank loans, out of total debt, of the .rms. This bank lending channel amplifies the effect of the traditional interest rate channel, which leads to a reduction in total debt and spending when monetary policy tightens. Our result agrees with, and complements, those obtained by Gómez González and Grosz (2007), who provide evidence of the existence of a bank lending channel in Colombia using bank-specific financial variables.

Keywords: Monetary transmission, bank lending channel, Colombia Classification JEL: E5; E52; E59; G21 (search for similar items in EconPapers)
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Working Paper: Bank Lending Channel of Monetary Policy: Evidence for Colombia, Using a Firms´ Panel (2009) Downloads
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Persistent link: http://EconPapers.repec.org/RePEc:bdr:borrec:545

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