The Balance Sheet Channel

Ethan Cohen-Cole () and Enrique Martinez-Garcia
Authors registered in the RePEc Author Service: Enrique Martínez García ()

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: In this paper, we study the role of the credit channel of monetary policy in the context of a DSGE model. Through the use of a regulated banking sector subject to a regulatory capital constraint on lending, we provide alternative interpretations that can potentially explain differences in the implementation of monetary policy without appealing to ad-hoc central bank preferences. This is accomplished through the characterization of the external finance premium as a function of bank leverage and systemic aggregate risk.

Date: 2009-12
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Citations: View citations in EconPapers (4)

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https://www.bcentral.cl/documents/33528/133326/DTBC_537.pdf (application/pdf)

Related works:
Chapter: The Balance Sheet Channel (2011)
Working Paper: The balance sheet channel (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchwp:537

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