Financial Frictions and the Monetary Transmission Mechanism: Theory, Evidence and Policy Implications
By Charles R. Bean, J. Larsen, Kalin Nikolov. Social Science Research Network, 2002
126 citations recorded by the source corpus.
This paper provides a brief survey of the role of financial frictions in the monetary transmission mechanism. After noting some of the key stylised facts that any model of the transmission mechanisms must be consistent with, we discuss both the classical interest rate channel and the credit and bank lending channels of monetary transmission. We then review the empirical evidence relating to the relative importance of these channels. Finally we consider what impact the presence of significant financial frictions might have on the conduct of monetary policy JEL Classification: E52, E58, E44
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Citations in the corpus
- Review of Monetary Policy in South Africa Since 1994 (2007, methodology): “This is thoroughly informed by recent literature, such as Bean et al (2002).”
- Inflation Dynamics and the Cost Channel of Monetary Transmission 1 (2004, result): “Similarly, temporary increases in the price level in response to an unanticipated rise in nominal interest rates are also found in recent studies for France, Italy, the UK and the US (see, e.g., Peersman and Smets, 2001; Bean et al., 2002; Dedola and Lippi, 2003).”
- The Output Composition Puzzle: A Difference in the Monetary Transmission Mechanism in the Euro Area and U.S. (2003, unknown): “ists, with excellent recent surveys provided by the papers in the 1995 symposium in the Journal of Economic Perspectives (Bernanke and Gertler, 1995; Meltzer, 1995; Obsfeld and Rogoff, 1995; Taylor, 1995), Christiano, Eichenbaum, and Evans (1999), Mankiw (2001), and Bean,”