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
Authors:	Kaufmann, Sylvia ; Scharler, Johann
Publisher:	Linz : Johannes Kepler University of Linz, Department of Economics
Subject:	New-Keynesian Phillips Curve \| Kreditgeschäft \| Bankenpolitik \| Inflation \| Bayes-Statistik \| Kointegration \| Schätzung \| USA \| EU-Staaten \| New Keynesian Phillips Curve \| Cost Channel \| Bank Lending Standards \| Bayesian Analysis

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Series:	Working Paper ; 0916
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	665634625 [GVK] hdl:10419/73588 [Handle] RePEc:jku:econwp:2009_16 [RePEc]
Classification:	E40 - Money and Interest Rates. General ; E50 - Monetary Policy, Central Banking and the Supply of Money and Credit. General
Source:	EconStor

Persistent link: https://www.econbiz.de/10010294872