Resource title

Bank loan supply and monetary policy transmission in Germany: An assessment based on matching impulse responses

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Resource description

This paper addresses the credit channel in Germany by using aggregate data. We present a stylized model of the banking firm in which banks decide on their loan supply in light of uncertainty about the future course of monetary policy. Applying a vector error correction model (VECM), we estimate the response of bank loans after a monetary policy shock taking into account the reaction of the output level and the loan rate. We estimate our model to characterize the response of bank loans by matching the theoretical impulse responses with the empirical impulse responses to a monetary policy shock. Evidence in support of the credit channel can be reported.

Resource author

Oliver Huelsewig, Eric Mayer, Timo Wollmershäuser

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Resource language

eng

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text/html

Resource resource URL

http://hdl.handle.net/10419/18744

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Adapt according to the presented license agreement and reference the original author.