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Taking stock: A critical review of recent research on monetary policy transmission mechanism

The classical and more recent literatures on the transmission of monetary policy on economic performance offer a wide range of issues. Among the issues are; the potential roles of financial intermediaries in economic growth, the transmission of monetary policy to real variables, and the choices of f...

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Main Author: Zakaria Bahari,
Format: Article
Published: Penerbit Universiti Kebangsaan Malaysia 2003
Online Access:http://journalarticle.ukm.my/1727/
http://www.ukm.my/penerbit/jem37-02.htm
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spelling my-ukm.journal.17272011-06-09T06:50:41Z http://journalarticle.ukm.my/1727/ Taking stock: A critical review of recent research on monetary policy transmission mechanism Zakaria Bahari, The classical and more recent literatures on the transmission of monetary policy on economic performance offer a wide range of issues. Among the issues are; the potential roles of financial intermediaries in economic growth, the transmission of monetary policy to real variables, and the choices of financial indicators. The last two issues, in providing financial services, the financial intermediaries contribute to the economic growth by transmitting monetary policy to real variables as well as becoming important financial indicators. Several studies find that the debt financing is important to firms, particularly for financing investment of new project and to expand the current business activities. The question arises on how the monetary policy affect the firm behaviour? We will show that there are two complementary ways of explaining about how firm might be influenced by the changes of monetary policy. First, the balance sheet channel is identified whereby the condition of firm’s balance sheets is a source of output fluctuations. Second, the bank lending channel that stresses the ability of monetary policy to regulate the pool of funds available to the bank-dependent firms. This paper provides the investigation of those issue Penerbit Universiti Kebangsaan Malaysia 2003 Article PeerReviewed Zakaria Bahari, (2003) Taking stock: A critical review of recent research on monetary policy transmission mechanism. Jurnal Ekonomi Malaysia, 37 . ISSN 0127-1962 http://www.ukm.my/penerbit/jem37-02.htm
institution Universiti Kebangsaan Malaysia
building Perpustakaan Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
description The classical and more recent literatures on the transmission of monetary policy on economic performance offer a wide range of issues. Among the issues are; the potential roles of financial intermediaries in economic growth, the transmission of monetary policy to real variables, and the choices of financial indicators. The last two issues, in providing financial services, the financial intermediaries contribute to the economic growth by transmitting monetary policy to real variables as well as becoming important financial indicators. Several studies find that the debt financing is important to firms, particularly for financing investment of new project and to expand the current business activities. The question arises on how the monetary policy affect the firm behaviour? We will show that there are two complementary ways of explaining about how firm might be influenced by the changes of monetary policy. First, the balance sheet channel is identified whereby the condition of firm’s balance sheets is a source of output fluctuations. Second, the bank lending channel that stresses the ability of monetary policy to regulate the pool of funds available to the bank-dependent firms. This paper provides the investigation of those issue
format Article
author Zakaria Bahari,
spellingShingle Zakaria Bahari,
Taking stock: A critical review of recent research on monetary policy transmission mechanism
author_facet Zakaria Bahari,
author_sort Zakaria Bahari,
title Taking stock: A critical review of recent research on monetary policy transmission mechanism
title_short Taking stock: A critical review of recent research on monetary policy transmission mechanism
title_full Taking stock: A critical review of recent research on monetary policy transmission mechanism
title_fullStr Taking stock: A critical review of recent research on monetary policy transmission mechanism
title_full_unstemmed Taking stock: A critical review of recent research on monetary policy transmission mechanism
title_sort taking stock: a critical review of recent research on monetary policy transmission mechanism
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2003
url http://journalarticle.ukm.my/1727/
http://www.ukm.my/penerbit/jem37-02.htm
_version_ 1643735126483402752
score 13.211869

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