Monetary Policy in the 1980s: How Bank Credit was Determined

Richard Werner ()

Chapter 20 in New Paradigm in Macroeconomics, 2005, pp 267-294 from Palgrave Macmillan

Abstract: Abstract In Chapter 16 it was found that the strong growth in bank lending during the 1980s was the main cause of asset price movements in the 1980s and early 1990s. Further, in Chapter 15 it was shown that the weak credit growth of the 1990s was the cause of the recession. The weak lending of the 1990s was due to banks’ substantial bad debts, which rendered them risk averse, thus increasing the always present rationing in the credit market. These findings motivate interest in the question why banks increased their lending so aggressively during the 1980s. Moreover, in the previous chapter the issue of how to avoid moral hazard was raised. Also for this purpose and the formulation of suitable policies it is necessary to identify the cause of the rapid bank lending of the 1980s and identify those who are responsible for it. It is this question that will be examined in the present chapter.

Keywords: Monetary Policy; Central Bank; Bank Credit; Bank Lending; Individual Bank (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:palchp:978-0-230-50607-7_21

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230506077

DOI: 10.1057/9780230506077_21

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().