Loan components and time varying effects of monetary policy shocks

Wouter J Den Haan and Steven Sumner
Authors registered in the RePEc Author Service: Wouter Denhaan ()

No 238, 2004 Meeting Papers from Society for Economic Dynamics

Abstract: This paper looks at the responses of bank loan components to a monetary tightening and compares the responses to those observed to output shocks. We find the results to be consistent with both a bank lending channel and a balance sheet channel for consumer loans. In contrast, wee find that C&I loans (and commercial paper) sharply decrease in response to output shocks but increase in response to monetary policy shocks. We argue that these results are hard to reconcile with a bank lending channel that constrains the supply of C&I loans. Instead we give reasons why the supply of C&I loans (and commercial paper) may increase during periods of high interest rates

Keywords: monetary policy; impulse response functions; credit market frictions (search for similar items in EconPapers)
JEL-codes: E44 E52 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:red:sed004:238

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