Recent results suggesting that monetary financing is more expansionary than bond financing in standard New Keynesian models rely on a duality between policy rules for the rate of money growth and the short-term bond rate, rather than a special role for money. We incorporate two features into a...

This paper outlines the properties of one of the models used at the Bank of England for analyzing the impact of energy prices on the UK economy. We build a dynamic general equilibrium model that includes a variety of channels through which energy prices affect demand and supply. On the demand...

This paper investigates the role of credit demand and supply shocks in driving the weakness in UK banks' lending and economic activity during both the recent financial crisis and the various UK financial crises since 1966. It uses a structural vector autoregression analysis to identify separate...

This paper uses a simple money demand and supply framework to estimate the impact of quantitative easing (QE) on asset prices and nominal spending. We use standard money accounting to try to establish the impact of asset purchases on broad money holdings. We show that the initial impact of £200...

It is well known that quantitative credit restrictions, rather than Bagehot-style ‘free lending' constituted the standard response to financial crises in the early days of central banking. But why did central banks in the past frequently restrict the supply of loans during financial crises? In...

We use daily transactional ledger data from the Bank of England's Archive to test whether and to what extent the Bank of England during the mid-nineteenth century adhered to Walter Bagehot's rule that a central bank in a financial crisis should lend cash freely at a penalty rate in exchange for...

This paper sets out an empirical framework for examining the dynamics of money and credit at a sectoral level. Our purpose is to understand and monitor the transmission mechanisms of different policies that affect the financial sector, with an eye to practical policy analysis. We use the banking...