The Flow of Funds Accounts, which catalog the financial flows associated with current income and production, are the leading source of data on credit aggregates. Many analysts use the accounts for determining the effect of financial market activity on the macroeconomy. While they undeniably...

This paper provides new evidence on the transmission of monetary policy in Italy by analyzing the effects of a restrictive monetary policy shock on the flows-of-funds variables. Firms reduce their issuance of debt and their acquisitions of financial assets, so that there is no evidence of strong...

This paper presents evidence that macroeconomic accounting models helped to anticipate the credit crisis and economic recession, whereas equilibrium models, ubiquitous in mainstream policy and research, did not. This study traces the intellectual pedigree of the accounting approach as an...

This paper provides new evidence on the transmission of monetary policy in the euro area, assessing the impact of an unexpected increase of the short-term interest rates on the lending and borrowing activity in different economic sectors. We exploit the information content of the flow-of-funds...