The Impact of Monetary Policy on Bank Balance Sheets

63 Pages Posted: 1 Sep 2000 Last revised: 16 Sep 2010

See all articles by Anil K. Kashyap

Anil K. Kashyap

University of Chicago, Booth School of Business; National Bureau of Economic Research (NBER); Federal Reserve Bank of Chicago

Jeremy C. Stein

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: August 1994

Abstract

This paper uses disaggregated data on bank balance sheets to provide a test of the lending view of monetary policy transmission. We argue that if the lending view is correct, one should expect the loan and security portfolios of large and small banks to respond differentially to a contraction in monetary policy. We first develop this point with a theoretical model; we then test to see if the model's predictions are borne out in the data.

Suggested Citation

Kashyap, Anil K. and Stein, Jeremy C., The Impact of Monetary Policy on Bank Balance Sheets (August 1994). NBER Working Paper No. w4821. Available at SSRN: https://ssrn.com/abstract=6040

Anil K. Kashyap

University of Chicago, Booth School of Business ( email )

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Jeremy C. Stein (Contact Author)

Harvard University - Department of Economics ( email )

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