Credit Shocks in a Monetary Business Cycle

Michal Kejak (), Szilárd Benk () and Max Gillman ()

No 133, 2004 Meeting Papers from Society for Economic Dynamics

Abstract: 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

Keywords: credit shock; deregulation; inflation; cash-in-advance (search for similar items in EconPapers)
JEL-codes: E31 E32 G38 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-fin, nep-mac and nep-mon
Date: 2004
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Persistent link: http://EconPapers.repec.org/RePEc:red:sed004:133

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