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Interest rates and Monetary Policy

C/E/582. Analysis of the credit channel of transmission of monetary policy

WORDS:
2300
DATE:
2010
PRICE:
29.99 GBP

This paper examines the evolution, mechanism and the affects of the credit channel of the monetary policy. A definition of the monetary policy is provided, as is an explanation of the evolution from the IS/LM based model to the financial accelerator model. The mechanism of the credit channel is evaluated, discussing bank lending and balance sheet. Arguments for and against credit channel is provided, and concludes with an evaluation of the topics discussed.

 

KEYWORDS: Evolution, mechanism, credit channel, monetary policy, IS/LM based model, financial accelerator model, bank lending, balance sheet,