This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window
Open in New Tab
Open in same window
Journal of Economic Perspectives: Vol. 9 No. 4 (Fall 1995)
JEP Volume. 9, Issue 4 | 
Previous ArticleNext Article
Sign up for Email Alerts Follow us on Twitter
Full-text Article (Complimentary)
View Comments on This Article (0) | Login to post a comment
Previous ArticleNext Article
Expand
Quick Tools:
Print Article Summary Email Link to this Article Export CitationSign up for Email Alerts Follow us on Twitter
Explore:
Inside the Black Box: The Credit Channel of Monetary Policy Transmission
Article Citation
Bernanke, Ben S., and
Mark Gertler. 1995. "Inside the Black Box: The Credit Channel of Monetary Policy Transmission."
Journal of Economic Perspectives,
9(4): 27-48.
DOI: 10.1257/jep.9.4.27
DOI: 10.1257/jep.9.4.27
Abstract
The 'credit channel' theory of monetary policy transmission holds that informational frictions in credit markets worsen during tight-money periods. The resulting increase in the external finance premium--the difference in cost between internal and external funds--enhances the effects of monetary policy on the real economy. The authors document the responses of GDP and its components to monetary policy shocks and describe how the credit channel helps explain the facts. They discuss two main components of this mechanism, the balance sheet and bank lending channels. The authors argue that forecasting exercises using credit aggregates are not valid tests of this theory.
Article Full-Text Access
Full-text Article (Complimentary)
Authors
Bernanke, Ben S. (Princeton U)
Gertler, Mark (NYU)
Gertler, Mark (NYU)
JEL Classifications
E52: Monetary Policy
Comments
View Comments on This Article (0) | Login to post a comment
