Bank of Finland paper studies impact of China’s credit channel
Monetary policy’s effects on credit have significant impacts on economic activity, researchers say
A working paper published by the Bank of Finland looks at how monetary policy’s impact on demand and supply for credit affects economic activity.
In China’s monetary policy and the loan market: How strong is the credit channel in China? Max Breitenlechner and Riikka Nuutilainen use a structural vector autoregressive framework. They say this enables them to identify monetary policy shocks, which are linked to supply and demand responses in China’s loan market.
The authors find that shocks that
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