The Use of Credit Ceilings in the Presence of Indirect Monetary

Plamen Yossifov
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Plamen Yossifov: International Monetary Fund
Authors registered in the RePEc Author Service: Пламен Йосифов ()

Macroeconomics from EconWPA

Abstract: In this paper, we introduce credit ceilings in the standard model of the money multiplier and analyze their role in central bank’s management of money supply in the presence of indirect monetary instruments. We show that under a regime of total credit ceilings, their optimal value equals the desired growth rate of the adjusted monetary base. Under a regime of partial credit ceilings, their optimal value depends on the desired growth rate of the adjusted monetary base, the degree of substitutability between the regulated and unregulated types of banks’ earning assets, and the autonomous growth rate of the latter.

Keywords: credit; ceilings; selective; credit; controls; money; multiplier (search for similar items in EconPapers)
JEL-codes: E51 E52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba and nep-mac
Date: 2003-02-27
Note: Type of Document - PDF; prepared on IBM PC; to print on PostScript; pages: 17 ; figures: included

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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpma:0302008

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