Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5098469 | Journal of Economic Dynamics and Control | 2014 | 23 Pages |
Abstract
A number of studies sought to measure the effects of non-standard policy on bank funding markets. This paper carries those estimates a step further by looking at the effects of bank funding market stress on the volume of bank lending. By separately modeling loan supply and demand, we determine how non-standard central bank measures affected bank lending by reducing stress in bank funding markets. Our results suggest that non-standard policy measures lowered bank funding volatility in the US and the Euro Area. Lower bank funding volatility in turn increased loan supply in both regions, contributing to sustained lending activity.
Keywords
Related Topics
Physical Sciences and Engineering
Mathematics
Control and Optimization
Authors
Seth Carpenter, Selva Demiralp, Jens Eisenschmidt,