Search our site
Search our site

Examining the bank lending channel over the business cycles: evidence from the United Kingdom housing sector

This event has taken place

View all upcoming events at Kingston University.

Time: 5.00pm - 6.00pm
Venue: Room 5007, John Galsworthy building, Penrhyn Road campus, Penrhyn Road, Kingston upon Thames, Surrey KT1 2EE
Price: free

Examining the bank lending channel over the business cycles: evidence from the United Kingdom housing sector

All are welcome to the Economics department's Research Seminar Series 2018. This week we are joined by Dr Rosen Azad Chowdhury, lecturer in Economics, Swansea University.

Abstract:

After the great recession, numerous studies have contributed to the understanding of the complex interplay between the bank lending channel (BLC) of the monetary transmission mechanism and the housing sector. Most of the studies examining the BLC assume the impact of monetary policy on the real economy is symmetric over the business cycle.

However, such a notion of a symmetric impact of monetary policy over the business cycle is wrong; mainly, due to uncertainty, financial frictions that vary over the business cycle and due to financial innovations, such as securitization that have pro-cyclical effects on bank lending. Moreover, apart from a few, the bulk of the empirical literature examining the BLC is done under a linear framework.

Unfortunately, few that tend to incorporate non-linearity are fraught with severe methodological issues and thus are susceptible to biases. This paper, by employing Markov-switching Vector Autoregression (MS-VAR) models and regime dependent impulse responses, captures asymmetric impacts of the BLC over the business cycle in an unbiased manner. The results suggest that magnitude of bank lending is not neutral over the business cycle. Furthermore, results also suggest effectiveness of the BLC has been impaired during UK recessionary periods.

For further information about this event:

Contact: Dr Shaikh Eskander
Email: Shaikh.Eskander@kingston.ac.uk

Directions

Directions to Room 5007, John Galsworthy building, Penrhyn Road campus, Penrhyn Road, Kingston upon Thames, Surrey KT1 2EE:

>
Events