EconPapers    
Economics at your fingertips  
 

Credit Disintermediation and Monetary Policy

Nicolas Crouzet ()
Additional contact information
Nicolas Crouzet: Northwestern University

IMF Economic Review, 2021, vol. 69, issue 1, No 3, 23-89

Abstract: Abstract Since the early 1990s, the share of loans in total debt of US firms appears to have declined. This paper explores the implications of this trend toward “disintermediation” for the transmission of monetary policy shocks. Empirically, investment among firms with high loan shares is significantly more responsive to monetary policy shocks. Moreover, this pass-through has declined since the early 1990s, when disintermediation started. A model where firms choose debt structure by trading off the flexibility of loans against the lower cost of bonds can account for the higher sensitivity of more bank-dependent firms to monetary shocks. In this model, disintermediation also leads to a decline in the overall pass-through of monetary shocks to investment.

JEL-codes: E52 G23 G32 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1057/s41308-020-00131-3 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:imfecr:v:69:y:2021:i:1:d:10.1057_s41308-020-00131-3

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41308/PS2

DOI: 10.1057/s41308-020-00131-3

Access Statistics for this article

More articles in IMF Economic Review from Palgrave Macmillan, International Monetary Fund
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2021-07-24
Handle: RePEc:pal:imfecr:v:69:y:2021:i:1:d:10.1057_s41308-020-00131-3