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Monetary Policy and the Bank Lending Channel: Evidence of Taiwan

Most theoretical and empirical literatures have investigated the credit channel of monetary transmission in a closed economy. However, when Taiwan becomes financially more internationalized, little literature can provide economic implication for the credit-channel effect of a monetary policy to the case of Taiwan. Therefore we set up a model with the credit market under an open economy to study the credit channel-effect of monetary policy with the inclusion of foreign assets and debts in the bank’s balance sheet. The main conclusion in our theoretical model is that the effect of a tight monetary policy on bank loans will be reduced in an open economy; furthermore, such effect may make bank loans increase after a contractionary monetary policy. Besides, the empirical evidence also shows that bank loans increase after a contractionary monetary policy with the data of Taiwan.

Identiferoai:union.ndltd.org:CHENGCHI/G0922580141
Creators吳仲強, Wu, Chung-Chiang
Publisher國立政治大學
Source SetsNational Chengchi University Libraries
Language英文
Detected LanguageEnglish
Typetext
RightsCopyright © nccu library on behalf of the copyright holders

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