Open AccessMonetary Expansion and the Banking Lending Channel
Author(s) -
Benjamin Miranda Tabak,
Tito Belchior Silva Moreira,
Dimas M. Fazio,
André Luiz Cordeiro Cavalcanti,
George Henrique de Moura Cunha
Publication year - 2016
Publication title -
plos one
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.99
H-Index - 332
ISSN - 1932-6203
DOI - 10.1371/journal.pone.0164338
Subject(s) - monetary economics , monetary policy , china , economics , money supply , stimulus (psychology) , stock (firearms) , context (archaeology) , empirical evidence , stock market , monetary base , financial system , business , psychology , philosophy , epistemology , psychotherapist , mechanical engineering , paleontology , political science , law , biology , engineering
This paper examines the bank lending channel, which considers how monetary authority actions affect the variation of loans. We focus on the BRICS (Brazil, Russia, India, China and South Africa) totalizing 1254 banks from five countries in the period 2000–2012 (totalizing 13 years). The empirical results show that the effect of money supply growth on the growth of loans is non-linear and inverted U-shaped. In this context, our results show empirical evidence expansionary monetary policies do not increase the propensity of economic agents to systematically take greater risks on the market. After a certain level of money stock, increases in the money supply do not lead to increased negotiated credit.