scholarly journals Agency costs and the monetary transmission mechanism

2018 ◽  
Vol 20 (1) ◽  
Author(s):  
Michael Reiter ◽  
Tommy Sveen ◽  
Lutz Weinke
Keyword(s):  
Monetary Economics ◽  
Transmission Mechanism ◽  
New Keynesian ◽  
Standard Theory ◽  
Monetary Transmission ◽  
Financial Friction ◽  
Economic Reason ◽  
Lumpy Investment ◽  
Monetary Transmission Mechanism ◽  
Simple Economic

Abstract Once New Keynesian (NK) theory is combined with a standard model of lumpy investment, the resulting framework loses its ability to generate a realistic monetary transmission mechanism. This is the puzzle uncovered in Reiter, Sveen, and Weinke [Reiter, M., T. Sveen, and L. Weinke. 2013. “Lumpy Investment and the Monetary Transmission Mechanism.” Journal of Monetary Economics 60: 821–834.]. The simple economic reason behind it is the unrealistically large interest rate elasticity of investment, as implied by the standard theory of lumpy investment. In order to address this puzzle we develop a NK model featuring fully flexible investment combined with a financial friction. This model is used to isolate the quantitative importance of the financial friction for the monetary transmission mechanism.

scholarly journals The Monetary Transmission Mechanism in the New Economy: Evidence from Turkey (1997-2006)

2007 ◽  
Vol 2 (1) ◽  
pp. 15-24 ◽  
Author(s):  
Atilla Cifter ◽  
Alper Ozun
Keyword(s):  
Interest Rates ◽  
Money Supply ◽  
New Economy ◽  
Transmission Mechanism ◽  
New Keynesian ◽  
Monetary Transmission ◽  
Causality Test ◽  
Monetary Transmission Mechanism ◽  
New Period ◽  
The New Period

The Monetary Transmission Mechanism in the New Economy: Evidence from Turkey (1997-2006)This study aimed to test the money base, money supply, credit capacity, industrial production index, interest rates, inflation and real exchange rate data of Turkey during the years 1997 - 2006. These were tested through the monetary transmission mechanism and passive money hypothesis, using the vector error correction model-based causality test. Empirical findings showed that the passive money supply hypothesis of the new Keynesian economy is supported in part by accommodationalist views and differs from those of structuralist and liquidity preference theories. However, the monetary transmission mechanism has established that long-term money supply only affects general price levels, while production is influenced by interest rates in the new period of the Turkish economy. Empirical findings show that in this new period, interest transmission mechanisms are at the forefront.

scholarly journals How does the monetary transmission mechanism work? Evidence from Turkey

2020 ◽  
Vol 20 (4) ◽  
pp. 375-382
Author(s):  
Ufuk Can ◽  
Mehmet Emin Bocuoglu ◽  
Zeynep Gizem Can
Keyword(s):  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Monetary Transmission Mechanism

scholarly journals Panel Data Analysis of Monetary Transmission Mechanism for European Union Countries

2017 ◽  
Vol 4 (2) ◽  
pp. 42
Author(s):  
Dina Cakmur Yildirtan ◽  
Selin Sarili
Keyword(s):  
European Union ◽  
Interest Rates ◽  
Debt Crisis ◽  
Panel Data Analysis ◽  
Aggregate Demand ◽  
Transmission Mechanism ◽  
Monetary Transmission ◽  
Response Analysis ◽  
Data Set ◽  
Monetary Transmission Mechanism

Monetary transmission mechanism is the mechanism which shows  in what ways and what extent interaction between the real economy-monetary policy, impacts aggregate demand and production. While transmission channels or mechanisms traditionally classified they divided into three categories; interest rates, Exchange rates and other asset prices.In this study to test the existence of the European debt crisis by the monetary transmission mechanism, 15 members of European Union country by using annual (2002-2014) data set were included into study. We use panel unit root tests to analyze whether the variables in the model are stationary or not. For the countries included in the study, panel causality tests developed by Granger is applied. Panel Vector Autoregressive Model has been estimated and results of Impulse-Response Analysis and Variance Decomposition have been interpreted.

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