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The Nuanced Role of Government Credit in Monetary Policy Transmission / Sophia Chen, Deniz Igan, Leila Aghabarari, Bernardus Van Doornik.
- Format:
- Book
- Government document
- Author/Creator:
- Chen, Sophia.
- Series:
- IMF Working Papers; Working Paper ; No. 2026/004
- IMF Working Papers
- Language:
- English
- Physical Description:
- 1 online resource (38 pages)
- Place of Publication:
- Washington, D.C. : International Monetary Fund, 2026.
- Summary:
- We investigate the role of government credit in monetary policy transmission, using detailed credit registry data from Brazil. We find that government direct credit can effectively support small and medium-sized enterprises (SMEs) in a tight monetary policy environment, aligning with developmental objectives. But it comes at the cost of diminishing the overall effectiveness of monetary policy transmission. We also uncover complexities introduced by government-subsidized lending, where the impact of monetary policy transmission is influenced by factors such as credit market segments, lending relationships, and prevailing monetary policy conditions. These insights provide valuable guidance for policymakers on the transmission of monetary policy and the trade-offs involved in government credit programs.
- Notes:
- Description based on print version record.
- ISBN:
- 979-82-290-3571-2
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