: (Monetary Policy and Corporate Investment: Analysis of the Asset Price Channel and the Balance Sheet Channel)

2018 ◽  
Author(s):  
SaangJoon Baak ◽  
Seung Whan Ryuk
Keyword(s):  
Monetary Policy ◽  
Asset Price ◽  
Balance Sheet ◽  
Corporate Investment ◽  
Investment Analysis ◽  
Balance Sheet Channel

The Channels of Transmission of Monetary Policy

2021 ◽  
pp. 45-88
Author(s):  
Juan Antonio Morales ◽  
Paul Reding
Keyword(s):  
Monetary Policy ◽  
Emerging Market ◽  
Asset Price ◽  
Balance Sheet ◽  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Monetary Transmission Mechanism ◽  
The Interest Rate ◽  
The Impact ◽  
Transmission Of Monetary Policy

This chapter explores the monetary transmission mechanism (MTM) in low financial development countries (LFDCs). It successively discusses the interest rate, asset price, bank credit, balance sheet, expectations, and real balance channels. For each channel, conceptual aspects about how it operates, how it transmits monetary policy impulses to the economy’s financial and real spheres, are first presented. Next, the impact of the specificities of LFDCs on the channel’s strength and reliability are examined and the available empirical evidence is surveyed. The chapter concludes with a global assessment of the effectiveness of the monetary transmission mechanism in LFDCs. Evidence points to a transmission mechanism that is effective although not very strong, and possibly also more uncertain than in advanced and emerging market countries.

The balance sheet channel of monetary policy: the panel evidence of Egypt

2016 ◽  
Vol 10 (3) ◽  
pp. 286-305 ◽  
Author(s):  
Mohamed Aseel Shokr ◽  
Zulkefly Abdul Karim ◽  
Mohd Azlan Shah Zaidi
Keyword(s):  
Monetary Policy ◽  
Balance Sheet ◽  
Balance Sheet Channel

scholarly journals Monetary policy transmission: Balance sheet channel and investment behavior of firms in Pakistan

2021 ◽  
Vol 13 (1) ◽  
pp. 1-12
Author(s):  
Amir Rafique ◽  
Muhammad Umer Quddoos ◽  
Shujat Ali ◽  
Faheem Aslam ◽  
Muneeb Ahmad
Keyword(s):  
Monetary Policy ◽  
Balance Sheet ◽  
Investment Behavior ◽  
Monetary Policy Transmission ◽  
Balance Sheet Channel ◽  
Policy Transmission

scholarly journals DUAL MONETARY INSTRUMENTS’ IMPACT ON THE PERFORMANCE AND STABILITY OF JAKARTA ISLAMIC INDEX

2018 ◽  
Vol 3 (2) ◽  
pp. 315-348
Author(s):  
Bazari Azizi
Keyword(s):  
Monetary Policy ◽  
Financial Market ◽  
Capital Market ◽  
Balance Sheet ◽  
Monetary Policies ◽  
Monetary System ◽  
Balance Sheet Channel ◽  
Monetary Policy Transmission Mechanism ◽  
The Stability ◽  
The Impact

The monetary instruments and capital market are closely related as these tools are operating in the money market. The influence of the monetary policy to the stocks and indexes’ performance has been the research interest in the previous literature. The monetary policies along with its’ instruments are transmitted not only in banking lending channel to affect the economic growth but also in the balance sheet channel. However, the conventional tools and policies are not adhering the sharia tenets. Hence, the sharia-compliance monetary system is emanated in Muslim majority countries, including Indonesia. Additionally, this establishment of policy is coupled with the emergence of the Islamic capital market in Indonesia. Thus, the analysis of the impact of either Islamic or conventional monetary system on the Islamic capital market in Indonesia that represented by the Jakarta Islamic Index (JII) is essential to look at its’ furthers effect on financial market growth.This study examines the impact of the Islamic and conventional monetary variables on the performance of the Jakarta Islamic Index in Indonesia. It also investigates the stability of the JII under the occurrence of the shock derived from the monetary instruments. Monthly closing value of the JII, conventional or interest rate, Islamic policy rate, and monetary base are assessed to address the research objectives in this paper. This study employs the VAR-VECM and Granger analysis to analyse the phenomenon. The monetary policy transmission mechanism through the financial market channel is the main channel that will be investigated in this paper. The study comprises of introduction, literature review, methodology, and lastly the discussion and conclusion.

scholarly journals THE CREDIT SUPPLY CHANNEL OF MONETARY POLICY TRANSMISSION MECHANISM: AN EMPIRICAL INVESTIGATION OF ISLAMIC BANKS IN PAKISTAN VERSUS MALAYSIA

2019 ◽  
Vol 5 (1) ◽  
Author(s):  
Syed Muhammad Abdul Rehman Shah
Keyword(s):  
Monetary Policy ◽  
Balance Sheet ◽  
Banking System ◽  
Real Income ◽  
Transmission Mechanism ◽  
Islamic Banks ◽  
Differential Impact ◽  
Credit Supply ◽  
Balance Sheet Channel ◽  
Supply Channel

The transmission mechanism of monetary policy is explained through the relationshipsbetween a change in money supply and the level of real income. Monetary policytransmits to the real sector through several different channels. Such channels includethe interest rate channel, the exchange rate channel, the asset-pricing channel, the creditsupply channel, and the bank balance sheet channel. This paper empirically investigatesthe credit supply channel of monetary policy and explores the differential impact ofmonetary policy on credit supply of Islamic banks in Pakistan versus Malaysia. Therobust two-step System-Generalize Method of Moments (GMM) estimator is appliedon an unbalanced panel dataset over the period 2005-2016. While estimating the effectsof three alternative measures of monetary policy on banks’ credit supply, several bankspecificvariables are included in the specification as control variables. We providestrong evidence on the existence of credit supply channel in the baseline models forboth countries and differential impact of monetary policy through Islamic banks inPakistan versus Malaysia in the extended models. Our findings suggest that there isa vital need to consider the nature of Islamic banks while devising the instrumentsof an effective monetary policy in countries with dual banking system like Pakistan,Malaysia, Indonesia, Bahrain, Saudi Arabia, Qatar and others.

scholarly journals Credit Supply and Monetary Policy: Identifying the Bank Balance-Sheet Channel with Loan Applications

2012 ◽  
Vol 102 (5) ◽  
pp. 2301-2326 ◽  
Author(s):  
Gabriel Jiménez ◽  
Steven Ongena ◽  
José-Luis Peydró ◽  
Jesús Saurina
Keyword(s):  
Monetary Policy ◽  
Firm Heterogeneity ◽  
Supply And Demand ◽  
Balance Sheet ◽  
Economic Conditions ◽  
Balance Sheet Channel ◽  
Loan Demand ◽  
Loan Supply ◽  
Credit Restriction ◽  
The Impact

We analyze the impact of monetary policy on the supply of bank credit. Monetary policy affects both loan supply and demand, thus making identification a steep challenge. We therefore analyze a novel, supervisory dataset with loan applications from Spain. Accounting for time-varying firm heterogeneity in loan demand, we find that tighter monetary and worse economic conditions substantially reduce loan granting, especially from banks with lower capital or liquidity ratios; responding to applications for the same loan, weak banks are less likely to grant the loan. Finally, firms cannot offset the resultant credit restriction by applying to other banks. (JEL E32, E44, E52, G21, G32)

scholarly journals Effects of Monetary Asset- Price Transmission on Investment and Inflation in the Euro Area

2019 ◽  
pp. 279-300
Author(s):  
Leef H. Dierks ◽  
Lars E. Spreng
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Stock Prices ◽  
Asset Price ◽  
Balance Sheet ◽  
Price Transmission ◽  
Price Inflation ◽  
European Central ◽  
Inflation Rates ◽  
Asset Price Inflation

Since the onset of the financial markets’ crisis in late 2008, the Eurozone has been subject to rather volatile headline inflation, occasionally even turning into (an admittedly modest) deflation. As eventually, conventional monetary policy seemed to be exhausted, the European Central Bank (ECB) resorted to unprece- dented unconventional measures. In 2010, it launched a first gov- ernment bond purchasing programme, which was followed by a series of different programmes, swelling its balance sheet to c. €4.7tn as per May 2019. The induced asset-price-inflation in con- junction with a continuous and persistently low HICP inflation rates inevitably raises the question how effective monetary trans- mission – particularly via asset-prices – (still) is. This contribution will investigate the effects of monetary asset- price transmission on investments and inflation. First, it analyses the reliability of stock markets as an indicator for firms’ investment, while emphasising the importance of uncertainty. Sec- ond, the paper examines how rising stock prices affected firms’ balance sheet and lending. Further, it provides an explanation as to why monetary policy failed to amplify lending in peripheral mem- ber states and why it had a comparatively low effect on borrowing costs in these regions. Third, it scrutinises the implication of an output gap, which monetary policy seeks to create, on different inflation parameters. Thus, the paper illustrates why the effects on HICP-inflation are less pronounced compared to other inflation measures.

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