State-run Banks, Money Growth, and the Real Economy / Randall Morck, M. Deniz Yavuz, Bernard Yeung.

Format:

Book

Author/Creator:

Morck, Randall.

Contributor:

National Bureau of Economic Research.

Yavuz, M. Deniz.

Yeung, Bernard.

Series:

Working Paper Series (National Bureau of Economic Research) no. w19004.

NBER working paper series no. w19004

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2013.

Summary:

Within countries, state-run banks' lending correlates with prior money growth; otherwise similar private-sector banks' lending does not. Aggregate credit and investment growth correlate with prior money growth more where banking systems are more state-run. Size and liquidity differences between state-run and private-sector banks do not drive these results; further tests discount broad classes of alternative explanations. Tests exploiting heterogeneity in likely political pressure on state-run banks associated with privatizations and elections suggest a command-and-control pseudo-monetary policy channel: changes in money growth, perhaps reflecting political pressure on the central bank, change banks' lending constraints; political pressure actually changes state-run banks' lending.

Notes:

Print version record

April 2013.