On December 12, 2019, Fed in Print will introduce its new platform for discovering content. Please direct your questions to Anna Oates

Home About Latest Browse RSS Advanced Search

Board of Governors of the Federal Reserve System (US)
Finance and Economics Discussion Series
How Does the Strength of Monetary Policy Transmission Depend on Real Economic Activity?
Horacio Sapriza
Judit Temesvary
Abstract

We study the relationship between the strength of the bank credit channel (BCC) of monetary policy and real GDP growth in the United States using quarterly commercial bank level data between 1986 and 2008. We find that the BCC was significantly stronger during periods of low economic growth. Monetary policy is more effective through this channel in spurring economic activity during periods of low growth, rather than in cooling the economy when growth is high. Furthermore, we find that the BCC operated through a broader range of loan categories and banks than previously documented, underscoring this channel’s economic relevance.


Download Full text
Cite this item
Horacio Sapriza & Judit Temesvary, How Does the Strength of Monetary Policy Transmission Depend on Real Economic Activity?, Board of Governors of the Federal Reserve System (US), Finance and Economics Discussion Series 2019-023, 08 Apr 2019.
More from this series
JEL Classification:
Subject headings:
Keywords: Bank balance sheet ; Bank lending channel ; GDP growth ; Monetary policy transmission
DOI: 10.17016/FEDS.2019.023
For corrections, contact Ryan Wolfslayer ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal