Interactions between Money, Lending and Investment in the UK Private Non-Financial Corporate Sector

28 Pages Posted: 5 Apr 2004

See all articles by Andrew Brigden

Andrew Brigden

Bank of England

Paul Mizen

University of Nottingham; Bank of England; Centre for Economic Policy Research (CEPR)

Abstract

In this paper we consider the additional information to be derived from modelling lending, investment and money in a jointly determined system of equations. We allow demand- and supply-side effects to influence the money, investment and lending equations. Using UK corporate data, we find acceptable equilibrium equations for investment, lending and money with a causal chain running from money and lending to investment and money to lending in a dynamic model. There is clear support for 'value added' from a lending equation and support for interactions between financial variables and real economic activity.

Suggested Citation

Brigden, Andrew and Mizen, Paul, Interactions between Money, Lending and Investment in the UK Private Non-Financial Corporate Sector. Available at SSRN: https://ssrn.com/abstract=513760

Andrew Brigden (Contact Author)

Bank of England ( email )

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London, EC2R 8AH
United Kingdom

Paul Mizen

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom
+44 115 951 5479 (Phone)
+44 115 951 4159 (Fax)

Bank of England

Threadneedle Street
London, EC2R 8AH
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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