Bank-Lending Standards, the Cost Channel and Inflation Dynamics

If firms borrow working capital to finance production, then nominal interest rates have a direct influence on inflation dynamics, which appears to be the case empirically. However, interest rates may only partly mirror the cost of working capital. In this paper we explore the role of bank lending standards as a potential additional cost source and evaluate their empirical importance in explaining inflation dynamics in the US and in the euro area.

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Year of publication:	2009-10
Authors:	Kaufmann, Sylvia ; Scharler, Johann
Institutions:	Institut für Volkswirtschaftslehre, Johannes-Kepler-Universität Linz
Subject:	New Keynesian Phillips Curve \| Cost Channel \| Bank Lending Standards \| Bayesian Analysis

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Extent:	application/pdf
Series:	Economics working papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 2009-16 33 pages
Classification:	E40 - Money and Interest Rates. General ; E50 - Monetary Policy, Central Banking and the Supply of Money and Credit. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008634616