Meta-Analysis: Effect of central bank’s key policy rate on banks’ lending interest rates

Oleksandra Chmel, Valentyna Sinichenko, Daryna Pustovoit and Anton Shmihel ()
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Anton Shmihel: Kyiv School of Economics

Modern Economic Studies, 2019, vol. 2, issue 1, 2-11

Abstract: The importance of the key policy rate is hard to underestimate. By lowering the policy rate, the central bank reduces the cost of borrowing, which stimulates investment and consumption. However, firms and consumers, who are the agents in the process, do not borrow directly from the central bank – they take out loans from commercial banks. Thus, in order to realize the central bank’s potential impact on the economy, it is important to analyses the first step of the pass-through: from the key policy rate to commercial lending rates. Is there a strong connection? The goal of our paper is to provide the answer to that question.

Keywords: meta-analysis; key policy rate; lending rate; central bank (search for similar items in EconPapers)
JEL-codes: C12 C83 E50 E58 (search for similar items in EconPapers)
Date: 2019
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