Leaning Against Windy Bank Lending /

Using an estimated dynamic stochastic general equilibrium model with banking, this paper first provides evidence that monetary policy reacted to bank loan growth in the US during the Great Moderation. It then shows that the optimized simple interest-rate rule features no response to the growth of ba...

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Autor principal: Melina, Giovanni
Altres autors: Villa, Stefania
Format: Revista
Idioma:English
Publicat: Washington, D.C. : International Monetary Fund, 2017.
Col·lecció:IMF Working Papers; Working Paper ; No. 2017/179
Accés en línia:Full text available on IMF
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245 1 0 |a Leaning Against Windy Bank Lending /  |c Giovanni Melina, Stefania Villa. 
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490 1 |a IMF Working Papers 
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500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a Using an estimated dynamic stochastic general equilibrium model with banking, this paper first provides evidence that monetary policy reacted to bank loan growth in the US during the Great Moderation. It then shows that the optimized simple interest-rate rule features no response to the growth of bank credit. However, the welfare loss associated to the empirical responsiveness is small. The sources of business cycle fluctuations are crucial in determining whether a 'leaning-against-the-wind' policy is optimal or not. In fact, the predominant role of supply shocks in the model gives rise to a trade-off between inflation and financial stabilization. 
538 |a Mode of access: Internet 
700 1 |a Villa, Stefania. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2017/179 
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