Identifying the macroeconomic effect of loan supply shocks.: An article from: Journal of Money, Credit & Banking

This digital document is an article from Journal of Money, Credit & Banking, published by Ohio State University Press on December 1, 2003. The length of the article is 7806 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

From the author: The inability to clearly distinguish the effects of shocks to loan supply from those to loan demand has made it difficult to quantify the economic importance of the credit channel in the transmission mechanism of monetary policy. This study provides an innovative approach to identifying loan supply shocks. Three different results confirm that loan supply shocks have been successfully isolated from shifts in loan demand. Our measure is particularly important for explaining inventory movements, the component of GDP most dependent on bank lending; the effect is present even during periods with strong loan demand; and the effect remains even when the unpredictable part of the loan supply shock is isolated. This identification enables us to show that loan supply shocks have had economically important effects on the U.S. economy.

Citation Details
Title: Identifying the macroeconomic effect of loan supply shocks.
Author: Joe Peek
Publication:Journal of Money, Credit & Banking (Refereed)
Date: December 1, 2003
Publisher: Ohio State University Press
Volume: 35 Issue: 6 Page: 931(16)

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