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Loan Commitments and Monetary Policy / George Sofianos, Arie Melnik, Paul Wachtel.
- Format:
- Book
- Author/Creator:
- Sofianos, George.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w2232.
- NBER working paper series no. w2232
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1987.
- Summary:
- The impact of loan commitment agreements on the way in which changes in monetary policy affects the economy is examined. In particular, the empirical relevance of quantity credit rationing in the transmission of monetary policy is studied with VAR models. We find evidence of a differential impact of monetary policy on loans under commitment and not under commitment. Our conclusion is that credit rationing for bank loans does occur, although loan commitments effectively protect borrowers from credit rationing. Thus, loan commitments which insulate borrowers from the effects of quantity rationing force monetary policy to work exclusively through interest rate channels.
- Notes:
- Print version record
- May 1987.
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