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dc.contributor.authorWollmershäuser, Timoen_US
dc.contributor.authorMayer, Ericen_US
dc.contributor.authorHülsewig, Oliveren_US
dc.date.accessioned2009-01-29T14:57:32Z-
dc.date.available2009-01-29T14:57:32Z-
dc.date.issued2006en_US
dc.identifier.urihttp://hdl.handle.net/10419/22364-
dc.description.abstractThis paper presents a New Keynesian model that dwells on the role of banks in the cost channel of monetary policy. Banks extend loans to firms in an environment of monopolistic competition by setting the loan rate according to a Calvo-type staggered price setting approach, which means that the adjustment of the aggregate loan rate to a monetary policy shock is sticky. We estimate the model for the Euro area by adopting a minimum distance approach. Our findings exhibit that, first, frictions on the loan market influence the propagation of monetary policy shocks as the pass-through of a change in the money market rate to the loan rate is incomplete, and, second, the cost channel is operating, but the effect is weak since inflation is driven by real unit labor costs rather than the loan rate. Our main conclusion is that the strength of the cost channel is mitigated as banks shelter firms from monetary policy shocks by smoothing lending rates.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesWürzburg economic papers 71en_US
dc.subject.jelE44en_US
dc.subject.jelE52en_US
dc.subject.jelE58en_US
dc.subject.ddc330en_US
dc.subject.keywordBank behavioren_US
dc.subject.keywordcost channelen_US
dc.subject.keywordminimum distance estimationen_US
dc.titleBank Behavior and the Cost Channel of Monetary Transmissionen_US
dc.typeWorking Paperen_US
dc.identifier.ppn518906183en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:wuewep:71-
Appears in Collections:W.E.P. - Würzburg Economic Papers, Lst. f. VWL, Geld u. internat. Wirtschaftsbeziehungen, Universität Würzburg

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