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The zero-lower bound (ZLB) may constrain the ability of Federal Reserve (Fed) to influence financial markets and the economy. This note examines the effectiveness of the interest rate channel and the credit channel of conventional and unconventional monetary policy while accounting for business cycle fluctuations. We use intraday industry returns and a number of industry-specific and firm-specific indicators to capture the sensitivity of firms' demand to interest rates (interest rate channel) and firms' financial constraints (credit channel). Our results indicate a dramatic change in the effectiveness of the transmission channels across business cycles and across periods. We find that the interest rate channel operates equally well during recessions and expansions pre-ZLB, but that this channel has ceased to function during the ZLB regardless of the stage of the business cycle. In contrast, the credit channel operates only during recessions in the conventional period, while it has been remarkably effective during both recessions and expansions in the ZLB era.1 [ABSTRACT FROM AUTHOR]

This paper's objective is to examine the asymmetric cointegration and asymmetric effects of financial development and monetary policy on monetary transmission mechanisms in the Nigerian context using annual data spanning the period from 1986 to 2023. This study pushes the frontiers of knowledge by providing information on the nonlinear impacts of monetary policy and financial sector innovations on monetary transmission mechanisms in Nigeria to help policymakers tailor their strategies to local conditions, enhancing the effectiveness of monetary interventions in the economy. To achieve this, this paper adopted nonlinear ARDL models to understand how changes in the direction of monetary policy and developments in the financial system induce changes in the transmission of monetary policy. The findings document the existence of asymmetries in both the short and long run, revealing that the impacts of financial development and monetary policy on the different monetary policy channels are not uniform. These asymmetries indicate that the responses of various economic variables to monetary policy actions differ depending on the level of financial development. These findings underscore the complexity of the monetary transmission mechanism and the necessity for a nuanced understanding of how financial development and monetary policy interact in different contexts. Consequently, this finding is symptomatic of some characteristics of those financial markets on their way toward advanced developments. As the financial system matures, monetary policy may have a greater impact on the cost of short-term funding for banks without having any discernible effect on the rates at which businesses and households access funding. Therefore, this paper recommends focusing on the policies that will foster the financial system across the banking sector, capital market, bond market, and overall financial sector to improve the efficiency of the monetary transmission process. [ABSTRACT FROM AUTHOR]

The present study explores the effectiveness of the credit channel of monetary policy transmission in India from the perspective of magnitude, timing, and composition puzzles. To validate, further investigation of the effectiveness of the balance sheet channel and bank lending channel using the corporate cash flows and interest rate spreads, respectively, has been done. The study employs the structural vector autoregression model using the long-time quarterly series sample period from June 1998 to June 2022. The findings show that the anomalies concerning magnitude, timing, and composition effect do not exhibit a strong presence in the Indian context. The analysis of the weighted average call money rate and coverage ratio suggests a weak presence of the balance sheet channel in India with a weak negative correlation of 0.2943 (p < 0.05). The overall behavior of spread analysis also shows a weak presence of the bank lending channel in India. Although some presence of the bank lending channel is seen on banks’ managed liability side, the effect of external finance premium is not reflected in the lending rates with a correlation of 0.0577 (p > 0.05) between prime lending rate spread and weighted average call money rate spread. From the evidence, the study concludes the weak presence of the credit channel in India. Therefore, the monetary authorities might have to rely on other channels or may devise other unconventional mechanisms like Operation Twist and Long-Term Repo Operations observed during the COVID-19 pandemic to steer the real economy.

Copyright of Perpectivas is the property of Revista Perspectivas and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Sri Lanka's monetary policy has evolved differently during and after a three-decade-long ethnic conflict. This paper empirically investigates effects of monetary policy shocks on Sri Lankan economy with particular focus on the strength of credit and exchange rate channels using a VAR model for 2003–2019 period. We find that: (i) monetary policy shocks have a significant and persistent impact on key macroeconomic variables even though several puzzling results emerge; (ii) the effects of monetary policy shocks are significant and more persistent in the post-conflict period than in the conflict period; (iii) a tight monetary policy effectively contains inflation in the post-conflict period; and (iv) interest rate and exchange rate channels play a dominant role while the credit channel responds with some lags in the post-conflict period. [ABSTRACT FROM AUTHOR]

One of the factors that change the results of the expansionary monetary policy through the credit channel on the economy is the financial frictions that affected Iran's economy especially in the 2002’s and 2022’s. These frictions are manifested in variables such as capital adequacy violations, the ratio of nonperforming loans, the ratio of fixed assets to the total assets of banks, and the government's net debt to banks. In this article, with the help of building a macro structural econometric model in the period of 1968-2022, the effect of expansionary monetary policy on the change of each type of financial friction has been investigated and compared with emphasis on the endogeneity of money on Iran's economy. The obtained results show that due to the endogeneity of money, the influence of the central bank's monetary policy on the real sector of the economy has decreased and most of its effect is manifested in nominal variables such as liquidity, inflation rate and exchange rate. In addition, an increase of one standard deviation in the ratio of nonperforming loans reduces the impact of the expansionary monetary policy on the real sector of the economy more than other mentioned financial frictions. After that, the decrease in capital adequacy, the increase in the government's net debt to banks, and the increase in the ratio of fixed assets to total assets are in the next level of importance of reducing the effectiveness of monetary policy.1.IntroductionIran’s economy heavily relies on banks to finance economic entities, emphasizing the crucial impact of monetary policy through the credit channel. However, the effectiveness of monetary policy on the real sector of economy can be impeded by financial frictions. These frictions intervene in financial transactions and may increase the costs associated with obtaining external financing, such as loans, for investors (Farzinvash et al., 2014). Empirical evidence suggests that, despite high liquidity, Iran’s economy has encountered a credit crunch, especially during the period spanning from 2002 to 2022. This credit crunch can be attributed to violations of prudential ratios, including capital adequacy, nonperforming loan ratio, fixed asset ratios to total bank assets, and the government’s net debt to banks.As a consequence of these frictions, banks face resource shortages and resort to borrowing from the Central Bank through overdrafts. This results in an expansion of the monetary base, subsequently increasing liquidity and leading to a rise in the general price level. Consequently, owing to the endogeneity of money in Iran’s economy, the Central Bank lacks an independent monetary policy instrument to effectively achieve its goals. The impact of liquidity on the real sector of economy is limited, with most impact observed in nominal variables and manifested as price increases.In this respect, the present study aims to examine the impact of financial frictions on the effectiveness of expansionary monetary policy through the credit channel, specifically focusing on the endogeneity of money. Additionally, it tries to compare the respective effects of the frictions on the Iranian economy. The analytical perspective ensures the distinctive and innovative aspect of the study.2.Materials and MethodsConcerning the period from 1968 to 2022, a large-scale macroeconometric model was developed based on aggregate supply–aggregate demand frameworks and national income accounting. The research model encompasses various components, including consumption and investment expenditures, government activities, foreign trade, production, money and credit, general price levels, exchange rates, and the balance of payments. Data for constructing the model was sourced from the Central Bank’s Time Series Data Bank, the Central Bank’s balance sheet, (non-)governmental banks balance sheets, the Statistical Centre of Iran, and the World Bank.The model consisted of 28 behavioral equations, 9 connecting equations, and 91 identities. Auto-Regressive Distributed Lag (ARDL) method was used to estimate the model equations, and all equations were concurrently solved through dynamic simulation. The study relied on the criteria such as Root Mean Square Percentage Error (RMSPE) and the Theil index of inequality (U) to test the model’s performance.3.Results and DiscussionIn order to investigate the influence of individual financial frictions on the impact of expansionary monetary policy on Iran’s economy, the study assumed an annual one standard deviation increase in bank debt to the central bank as a monetary policy instrument in each considered scenario. The scenario development period spans five years, from 2018 to 2022, where the baseline trend represents the state of implementing solely expansionary monetary policy while keeping all types of financial frictions invariable in the current state of Iran’s economy.Moreover, in case of one standard deviation alteration in each financial friction during the implementation of expansionary monetary policy, it can be used to classify capital adequacy, nonperforming loans ratio, the government’s net debt to banks, and fixed asset ratios to total bank assets in the scenarios 1, 2, 3, and 4, respectively (see Table 1). Table 1. The average percentage deviation of the simulated values of the important endogenous variables in the examined scenarios from the base simulated values during the period 2018–2022Scenario 4:Increase in the fixed asset ratios to total bank assetsScenario 3:Increase in the government’s net debt to banksScenario 2:Increase in the nonperforming loan ratio Scenario 1:Reduction in capital adequacy of banksVariables-18.63-23.33-24.9-22.13Depth of bank credits-3.16-3.25-3.22-2.86Production capacity utilization rate-5.14-6.14-6.38-5.96Investment-1.82-2.3-2.4-2.24Employment-1.94-2.26-2.36-2.39Total factor productivity-2.84-3.2-3.3-3.23Gross domestic product-3.1-3.49-3.6-3.52Non-oil gross domestic product12.8913.8413.8414.19Changes in inventories19.3731.4235.4236.24Liquidity3.15.185.935.81Inflation rate7.3312.4414.1114.36Exchange rate* Source: Research resultsTable 1 illustrates that the impact of expansionary monetary policy varies across different scenarios examined. Scenario 2 (i.e., the increased ratio of nonperforming loans) impacts both the real and nominal sectors of economy by causing more significant fluctuations in these variables compared to the baseline simulation. Scenarios 1, 3, and 4 hold subsequent degrees of importance in diminishing the effectiveness of monetary policy.4.ConclusionBased on the findings, it can be concluded that the effectiveness of expansionary monetary policy on the real economy weakens the most when the nonperforming loan ratio increases, compared to three other financial friction indicators. Therefore, to mitigate nonperforming loans in banks, the study suggests that economic policymakers focus on controlling inflation rates, exchange rates, fluctuations in gross domestic product, and fluctuations in investment in the real estate sector. The priority should also be given to monitoring the decline in the quality of bank management due to the increase in the ratio of bank credit balance to total volume deposits after deducting the legal reserves. It is also worth noting that the proper implementation of Islamic contracts by banks can significantly contribute to reducing nonperforming loans.

This paper’s objective is to examine the asymmetric cointegration and asymmetric effects of financial development and monetary policy on monetary transmission mechanisms in the Nigerian context using annual data spanning the period from 1986 to 2023. This study pushes the frontiers of knowledge by providing information on the nonlinear impacts of monetary policy and financial sector innovations on monetary transmission mechanisms in Nigeria to help policymakers tailor their strategies to local conditions, enhancing the effectiveness of monetary interventions in the economy. To achieve this, this paper adopted nonlinear ARDL models to understand how changes in the direction of monetary policy and developments in the financial system induce changes in the transmission of monetary policy. The findings document the existence of asymmetries in both the short and long run, revealing that the impacts of financial development and monetary policy on the different monetary policy channels are not uniform. These asymmetries indicate that the responses of various economic variables to monetary policy actions differ depending on the level of financial development. These findings underscore the complexity of the monetary transmission mechanism and the necessity for a nuanced understanding of how financial development and monetary policy interact in different contexts. Consequently, this finding is symptomatic of some characteristics of those financial markets on their way toward advanced developments. As the financial system matures, monetary policy may have a greater impact on the cost of short-term funding for banks without having any discernible effect on the rates at which businesses and households access funding. Therefore, this paper recommends focusing on the policies that will foster the financial system across the banking sector, capital market, bond market, and overall financial sector to improve the efficiency of the monetary transmission process.

Current account imbalances and housing price boom-bust cycles have become the defining characteristics of the pre-global financial crisis period. In the same period, it is observed that even though the developments of the economies show similar trends in many countries (e.g. an increase in credit supply, a decrease in interest rates), they have distinct characteristics (e.g. the volatility of house prices, and level of current account imbalances). Additionally, their final impacts on the economy vary to a significant degree from country to country. The institutional features of the markets (e.g. accessibility of credit information, protection of investors) have the potential to contribute to this differentiation. However, there are no studies on the effect of institutional features on the relationship between house prices and current account imbalances. The aim of this study is to examine the relationship between house prices and current account imbalances as well as the role of institutions in this relationship for 14 EU countries. To do so, a simultaneous equations model is used. The results of the empirical analysis show that in the 2007-2008 global financial crisis, there is a positive and significant relationship between house prices and current account imbalances, and institutional features have a potential role in the strength of this relationship. [ABSTRACT FROM AUTHOR]

Copyright of International Journal of Economic & Social Research is the property of Abant Izzet Baysal University, Faculty of Economics & Administrative Sciences and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study aims to evaluate the effect of bank profitability on the monetary policy transmission of the Bank of Central African States (BEAC). In order to accomplish this, we conducted a panel data analysis using a sample of 12 commercial banks that were active in Cameroon over the period 2010-2021. The Credit National Council of Cameroon provided the data used in this study. The Fully Modify Ordinary Least Square (FMOLS) and Dynamic Ordinary Least Square (DOLS) methods are used to estimate our model. We find that the most profitable banks are less sensitive to the restrictive monetary policy shocks than those with low profitability. This result shows that bank's profitability negatively affect the effectiveness of monetary policy. Consequently, we advise BEAC to promote the entry of new commercial banks into the Cameroon financial sector. This will lead to a decline in bank profitability while also raising bank sensitivity to change in monetary policy. [ABSTRACT FROM AUTHOR]

This article presents a new contribution to the economic literature, through the analysis of the impact of monetary shocks in the main macroeconomic varia-bles and in the credit market, in Brazil, between 2011 and 2020. Three method-ologies of VAR models are used, classical (in the structural and reduced form), and bayesian (in reduced form). The results indicate that after the positive shock in the bank spread, the product moves rapidly in the first months in the negative direction, suggesting that the basic interest rate spreads to the credit market. Through the impulse-response functions, what is perceived is the little influence of the Selic rate on product and price variables. On the contrary, they influence the interest rate, which may indicate a reaction from Central Bank and expectations to changes in the main economic variables. As for credit, it does not seem to in-fluence most variables.

Economic policies aimed at managing economic variables in the short and long term have always been of special importance. These policies seek to reduce economic fluctuations in the short term and increase sustainable economic growth in the long term. One of these policies is monetary policy, which is mainly carried out by central banks worldwide. This paper uses the Keynesian Dynamic Stochastic General Equilibrium (DSGE) model to examine the effects of monetary policy on the real variables of the Iranian economy through the credit channel and the balance sheet channel. The presented model analyzed information about macroeconomic variables in Iran for the period from 1990 to 2020. The obtained results show that with the implementation of restrictive monetary policy in the economy, all productive activities of enterprises decreased, and this led to a decrease in household income, which in turn reduced household savings in the form of bank deposits. Because the most important sources of financing for banks are deposits, the ability of banks to offer loans was reduced. On the other hand, a restrictive monetary shock was associated with a decline in the value of corporate securities. As a result, the amount of received loans by firms was reduced by the value of the assets. This reduced the demand of banks for bank loans, which intensified the effects of the initial shock, along with a reduction in the banks' ability to provide lending services. Further, the results indicate the relative success of the model in simulating Iran's macro economy. [ABSTRACT FROM AUTHOR]

This article presents a new contribution to the economic literature, through the analysis of the impact of monetary shocks in the main macroeconomic variables and in the credit market, in Brazil, between 2011 and 2020. Three methodologies of VAR models are used, classical (in the structural and reduced form), and bayesian (in reduced form). The results indicate that after the positive shock in the bank spread, the product moves rapidly in the first months in the negative direction, suggesting that the basic interest rate spreads to the credit market. Through the impulse-response functions, what is perceived is the little influence of the Selic rate on product and price variables. On the contrary, they influence the interest rate, which may indicate a reaction from Central Bank and expectations to changes in the main economic variables. As for credit, it does not seem to influence most variables. [ABSTRACT FROM AUTHOR]

This study investigates the dynamic linkages between the efficiency of 126 selected banks and the Single Monetary Policy (SMP) defined by credit channel, interest rate channel, exchange rate channel, and price stability in 17 Euro area countries from 1999 to 2012. The dynamic generalised method of moments (GMM) estimator shows a positive relationship between the bank's cost and profit efficiency and bank lending and liquidity by estimating the two-stage panel regression model. Still, capitalisation, exchange rate, inflation targeting (price stability), long term interest rate targeting was associated with lower cost and profit efficiency scores. Therefore, the impact of the Maastricht Protocol targeted policy, coefficients of inflation and long-term interest rate targeting variables are negatively related to the bank efficiency level. Specifically, on average higher bank lending, liquidity and deposit facility can be associated with improving profit efficiency of banks. In contrast, capitalisation, exchange rate, inflation targeting, and long-term interest rate targeting variables had a negative effect on cost and profit efficiency levels. The policy implication arising from the analyses presented is that the European monetary authority has faced significant pressures of inflation targeting and long-term interest rate targeting policy on bank performance that negatively influence bank efficiency.

The development of the Nigerian financial system has been scrutinized in the recent years as to whether the system support the growth of the economy according to financial sector development theories. However, the inability of previous studies to adequately pay attention to the credit channels of financial sector development necessitated this study. Thus, using data from 1986 to 2018, this study provide a nexus between credit channels of financial sector development and economic growth in Nigeria estimated with Autoregressive Distributed Lag technique (ARDL). Findings from the Bound Co-integration result suggested a long-run relationship between credit channels of financial sector development and economic growth in Nigeria. The study found and concluded that, credit to core sector and credit to government impede economic growth in the short, with credit to core sector stimulating economic growth in the long run. The study recommended that effective policies should be formulated to further allocate more credit to the core sector as major driver of economic growth. Credit allocated to government should be judiciously utilized for growth enhancing purposes.

This study investigates on which channels the monetary transmission mechanism works effectively. In this context, quarterly data for the period 2005-2017 is used for Turkey and the variables used to determine the efficiency of the monetary transmission mechanism are analyzed by the VAR method. The obtained results indicate that the loans and reserves have a more effective role on the inflation as a channel of the monetary transmission mechanism. According to the long run results, while the exchange rate and reserves channel have a negative effect on the real GDP, it is revealed that loans have a positive effect on the real GDP in the long run stabilization.

The presence of Islamic and conventional banking in the dual financial system of Indonesia equally hold the role as financial intermediator which theoretically banks collect fund from the debitors to be distributed to creditors. However, along with the changing of time there has been a development in the financial industry, when financial deregulation occurs, where the role of providing credit is not only owned by the banks but also other financial institutions. As the result, banks are no longer considered as the center of financial intermediation but could be replaced by other financial instruments. This study aims to reconsider the role of banking as financial intermediation in the monetary transmission mechanism using three methodoligal approaches which are Vector Autoregression and Vector Error Correction Model (VAR-VECM), Error Correction Model (ECM), and Autoregressive Distributed Lag (ARDL). The long-term results of ECM and VECM estimations both show that credit and finacing channel are still relevant to be employed in the monetary transmission mechanism after the development of financial sector and the change of monetary policy, yet only have an impact to economy and do not give effect to inflation. While the result of ARDL estimation indicates that none of the variables affect the monetary policy objectives which means that credit and financing channel are considered to be getting weaker in the monetary transmission mechanism.

The debate on the effective of the credit channel of monetary policy transmission has been a burning issue on monetary policy discourse for a while. Romer and Romer (1989), Ramsey (1993), Oliner and Rudebusch (1995), and Morris and Sellon (1995) raised some doubts about the existence and effectiveness of the credit channel. Alternatively, several other studies have found support for the credit/bank lending channel (see for instance, Bernanke and Blinder (1988), Bernanke and Blinder (1992), Gertler and Gilchrist (1994), Bernanke and Gertler (1995), Peek and Rosengren (1995), Kashyap, Stein and Wilcox (1993), Kashyap and Stein (1995, 2000), and Suzuki (2004). Therefore, the validity of bank lending/credit channels remains largely inconclusive and an empirical issue. Although the transmission mechanism of monetary policy in Nigeria has been examined in numerous studies, there is no consensus on the most effective channel; and there is scant evidence of the role of credit channel in the transmission of monetary policy. In this paper, we examine the validity and efficacy of the credit channel in the monetary policy transmission in Nigeria, using a vector autoregressive model to analyse monthly data spanning ten years (2008-2018). The empirical analysis relies on Uslu (2016) modified slightly to substitute Bank total asset and Bank deposits to represent the asset side and liability side of the bank's balance sheet, respectively. Purchasing Managers Index (PMI), consumer price index (CPI) and the real effective exchange rate (REER) are used as proxy for development in macroeconomic activity; while all share index (ASI) and market capitalization (MK) denote substitutable assets in the balance sheet of the banks. All series except the money market rates were transformed into natural logarithms. In addition, nominal series were transformed to real variables by normalization using the consumer price index. We find that a positive shock to monetary policy rate has no effect on bank lending to private sector. This could be due to a few factors. Primarily, the Nigerian financial industry is plagued by a low ratio of lending to private sector. Nigerian banks show a preference for government bonds and other securities, which stifles lending to the presumably risky private sector. It is also possible that monetary policy rates are already so high, driven by Nigeria's growing debt needs and exchange rate crises; that the lending to private sector has declined to such a level that it no longer responds to positive credit shocks. [ABSTRACT FROM AUTHOR]

The development of the Nigerian financial system has been scrutinized in the recent years as to whether the system support the growth of the economy according to financial sector development theories. However, the inability of previous studies to adequately pay attention to the credit channels of financial sector development necessitated this study. Thus, using data from 1986 to 2018, this study provide a nexus between credit channels of financial sector development and economic growth in Nigeria estimated with Autoregressive Distributed Lag technique (ARDL). Findings from the Bound Co-integration result suggested a long-run relationship between credit channels of financial sector development and economic growth in Nigeria. The study found and concluded that, credit to core sector and credit to government impede economic growth in the short, with credit to core sector stimulating economic growth in the long run. The study recommended that effective policies should be formulated to further allocate more credit to the core sector as major driver of economic growth. Credit allocated to government should be judiciously utilized for growth enhancing purposes. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Financial Researches & Studies / Finansal Araştirmalar ve Çalişmalar Dergisi is the property of Marmara University, School of Banking & Insurance and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Purpose – The purpose of this paper is to analyze the credit channel effects on investment behavior for the US and the Euro area. Design/methodology/approach – This paper uses the dynamic stochastic general equilibrium model and calibrates a version of the Carlstrom and Fuerst’s (1997) agency cost model of business cycles with time-varying uncertainty in the technology shocks that affect capital production. To highlight the differences between the US and European financial sectors, the paper focuses on two key components of the lending channel: the risk premium associated with bank loans and the bankruptcy rates. Findings – This paper shows that the effects of minor differences in the credit market translate into large, persistent and asymmetric fluctuations in real and financial variables and depend on the type of shocks. The results imply that the Euro areas supply elasticities for capital are less elastic than that of the USA following a technology shock. Finally, the authors find that the adverse impact of uncertainty shocks is heterogeneous across countries and amplified by the steady-state bankruptcy rate and risk premium. Originality/value – This paper quantifies the effects of uncertainty shocks when there is a credit channel due to asymmetric information between lenders and borrowers for the Euro area countries, and then compares the results to that of the USA. This paper shows that financial accelerator mechanism could potentially play a significant role in business cycles in the Euro area. This result directly lends one to conclude the following: the credit channel that affects the financial sector does indeed matter for macroeconomic behavior, and that policy makers should be attentive in smoothing out uncertainties if the economic policies are to lower the business and financial cycle volatilities.

We test whether the credit channel of the monetary policy was present in the United States' economy from January 2001 to April 2016. To this end, we use a factor-augmented vector autoregression, and we impose sensible theoretical sign restrictions in our structural identification scheme. We use the expected substitution effect between bank commercial loans and commercial papers to identify the credit supply channel. We found that the credit channel appears to have operated in the US economy during the sample period. However, when we split the sample, we found that the credit channel did not operate after the subprime crisis (close to the Zero Lower Bound of the interest rate). This result is robust to changing the sign restriction horizons. It supports current views in the literature regarding the ineffectiveness of the credit channel as a means to foster real economic activity during crises episodes. [ABSTRACT FROM AUTHOR]

Copyright of Financial Space is the property of Cherkasy Institute of Banking, University of Banking of the National Bank of Ukraine and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Çankırı Karatekin University Journal of the Faculty of Economics & Administrative Sciences is the property of Cankiri Karatekin University, Faculty of Economics & Administrative Sciences and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Research Journal of Politics, Economics & Management / Siyaset, Ekonomi ve Yönetim Araştırmaları Dergisi is the property of Research Journal of Politics, Economics & Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper analyses the effects of U.S. monetary policy on stock markets. We present evidence that individual stocks react in a highly heterogeneous fashion to U.S. monetary policy shocks and relate this heterogeneity to financial constraints and Tobin's q. First, we show that there are strong industry-specific effects of U.S. monetary policy. Second, we also find that for the 500 individual stocks comprising the S&P 500 the firms with low cash flows, small size, poor credit ratings, low debt to capital ratios, high price-earnings ratios, or a high Tobin's q are affected significantly more by monetary policy. [ABSTRACT FROM AUTHOR]

Money and its role in the economy has always been an indispensable part of economic debates, because policymakers and economists have always had conflicted views about the role of this policy variable from different directions of thought. This article in this direction and using quarterly data over the 1393-1369 period for the Iranian economy studies issues such as neutrality of money, asymmetric monetary shocks and the credit channels through which monetary policy transmitted to the production. For this purpose, using the Markov-Switching model we determined the business cycle for Iran and we separated positive and negative monetary shocks from one another. Then the result of estimating four different scenarios, using ARDL models, show that money is neutral in the long run (with the emphasis on the credit channel) in the economy of Iran and the impact of credit shocks on output is asymmetric and effective during business cycles in the short run.

This study investigates on which channels the monetary transmission mechanism works effectively. In this context, quarterly data for the period 2005-2017 is used for Turkey and the variables used to determine the efficiency of the monetary transmission mechanism are analyzed by the VAR method. The obtained results indicate that the loans and reserves have a more effective role on the inflation as a channel of the monetary transmission mechanism. According to the long run results, while the exchange rate and reserves channel have a negative effect on the real GDP, it is revealed that loans have a positive effect on the real GDP in the long run stabilization. [ABSTRACT FROM AUTHOR]

Using a panel of macroeconomic data for Canada and its 10 provinces, we estimate the dynamic effects of monetary policy shocks from the mid‐1980s until the present. We then relate the change in the impact of these shocks to macroeconomic factors including demographics, specifically changes in the old age dependency ratio. We find that the inflation‐targeting regime has had an ambiguous effect on the impact of monetary policy shocks in Canada. On the other hand, changing demographics have unambiguously reduced the impact of monetary policy shocks. This can help to explain tepid inflation since the financial crisis and could eventually undermine the effectiveness of Canada's inflation targeting regime. [ABSTRACT FROM AUTHOR]

This paper contributes to the governance literature by analyzing the specific mechanisms through which governance affects economic growth: The credit channel. Specifically, it investigates the growth impact of governance on industries with different levels of dependence on external finance. Better governance mitigates credit market imperfections by increasing transparency and accountability and reducing government-policy distortions, promoting productive investment and entrepreneurship development, with a disproportionate impact on sectors that depend on external finance. This paper indeed finds that countries with well-functioning governments are better at providing growth and investment environments for the expansion of industries that rely heavily on external finance and the formation of new establishments in these industries, when controlling for financial development. These results are robust to possible reverse causality, different specifications, subsamples and outliers. [ABSTRACT FROM AUTHOR]

Copyright of El-Bahith is the property of University of Kasdi Merbah Ouargla and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Structural vector autoregression (SVAR) model is employed over the period 2005:12-2018:6 in order to investigate the impact of credit shocks on macroeconomic performance in Turkey. Empirical evidence proves that credit shocks do matter in explaining macroeconomic performance indicated by a set of macroeconomic variables. Results indicate that positive credit shocks in Turkey increase output but also produce inflationary pressure. Significant empirical evidence proves that increase in credit results in increase in real effective exchange rates and the current account balance. We conclude that macro prudential precautions to control credit expansion are crucial in controlling the current account deficit in Turkey. [ABSTRACT FROM AUTHOR]

The period of global nuisance of banking and financial sector during the international financial crisis continues to have overwhelming implications in the current period, which requires careful research of monetary and financial phenomena locally and globally. In this sense, this article aims to highlight key aspects of the Romanian investment environment in the context of international economic environment and monetary policy transmission mechanisms in the Romanian economy. Following this approach, the study focuses on analyzing the financial position of banks operating in Romania, the evolution of lending by type of entity and positive/negative aspects about the impact of monetary policy measures and the NBR regulations on bank lending. The study shows conclusively the positive and the negative effects of lending evolution on the Romanian economy, on the solvency and bankruptcy risk of Romanian companies and on the behavior of debtors and creditors in credit relationships.

The transmission mechanisms of monetary policy through commercial banks captured great attention by academics and central bankers. Despite the huge volume of research, there is no absolute agreement about the impact of the change in the monetary policy on commercial banks. With reference to the bank lending channel theory, this study aims at detecting the long- and short-run impacts of four monetary policy tools exploited by the central bank of Lebanon to guide banks who are lending to the private sector. The study covered the period January 1992-December 2016 using monthly data. The aggregate credit granted to the resident private sector was used as the dependent variable, while bank capital, money supply, interest rate, and the inflows of non-resident deposits serve as independent variables. The Vector Error Correction Model (VECM) was adopted in this study as it does not require the variables to be originally stationary. This model is able to reveal the potential long-run causal relationship between exploited time series. Moreover, the Wald test was performed as a complementary test to examine the existence of short-run effects on bank credit. The Vector Error Correction Model revealed a long-run impact running from money supply, while the other three variables did not transmit changes in monetary policy towards bank credit. Besides, the Wald test has shown a short-term impact running from non-resident deposits towards bank lending. Additionally, the Granger causality test demonstrated that non-resident deposits have a causal effect on bank credit, thus it helps in predicting the future trend of bank lending. In contrast, both bank capital and interest rate didn't have any significant effect on bank lending behavior in Lebanon on both short- and long-run. The obtained results have important policy implications which suggest that if monetary policy aims at expanding (contracting) bank lending through monetary easing (tightening), it should increase (decrease) money supply to achieve a long-run impact. However, it has to encourage (discourage) the inflow of non-resident deposits to achieve a short-run impact. Additionally, the results suggest that in Lebanon, changes in bank capital and interest rate will not cause shifts in the supply of loans. [ABSTRACT FROM AUTHOR]

Abstract: This study examines the impact of unconventional monetary policies on the stock market when the short‐term nominal interest rate is stuck at the zero lower bound (ZLB). Unconventional monetary policies appear to have significant effects on stock prices and the effects differ across stocks. In agreement with existing credit channel theories, I find that firms subject to financial constraints react more strongly to unconventional monetary policy shocks [especially large‐scale asset purchases (LSAPs)] than do less constrained firms. These results imply that the credit channel is as important as the interest rate channel in the transmission of unconventional monetary policies at the ZLB. [ABSTRACT FROM AUTHOR]

I document that US financial uncertainty shocks, measured by an increase in VIX, have a substantial impact on the output of emerging market economies (EMEs) without a material impact on US output during the last two decades. To understand this puzzling phenomenon, I propose a credit channel as a propagation mechanism of US financial uncertainty shocks to EMEs. I augment a boom-bust cycle model of EMEs by Schneider and Tornell (Rev Econ Stud 71(3):883-913 2004) with a portfolio choice model of constrained international investors. As international investors pull their money from EMEs-to satisfy their Value-at-Risk constraints-in response to financial uncertainty shocks, borrowing costs increase and domestic credit contracts. Higher borrowing costs and a decline in domestic credit, in turn, lead to a fall in investment in the non-tradable sector that causes a real depreciation via currency mismatch prevalent in EMEs and a decline in total output through sectoral linkages. The empirical regularity obtained by estimating structural VARs of 18 EMEs is consistent with the prediction of the model. [ABSTRACT FROM AUTHOR]