State-run Banks, Money Growth, and the Real Economy

Randall Morck, M. Deniz Yavuz and Bernard Yeung

No 19004, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Within countries, state-run banks’ lending correlates with prior money growth; otherwise similar private-sector banks’ lending does not. Aggregate credit and investment growth correlate with prior money growth more where banking systems are more state-run. Size and liquidity differences between state-run and private-sector banks do not drive these results; further tests discount broad classes of alternative explanations. Tests exploiting heterogeneity in likely political pressure on state-run banks associated with privatizations and elections suggest a command-and-control pseudo-monetary policy channel: changes in money growth, perhaps reflecting political pressure on the central bank, change banks’ lending constraints; political pressure actually changes state-run banks’ lending.

JEL-codes: E5 G1 G21 G28 G3 O16 P5 (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-mac and nep-mon
Note: CF
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published as Randall Morck & M. Deniz Yavuz & Bernard Yeung, 2019. "State-Run Banks, Money Growth, and the Real Economy," Management Science, INFORMS, vol. 65(12), pages 5914-5932, December.

Downloads: (external link)
http://www.nber.org/papers/w19004.pdf (application/pdf)

Related works:
Journal Article: State-Run Banks, Money Growth, and the Real Economy (2019)
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:nbr:nberwo:19004

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w19004

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().