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Bank Lending Channel of Monetary Policy: Evidence for Colombia, Using a Firms´ Panel

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  • José Eduardo Gómez
  • Paola Morales Acevedo

Abstract

In this paper we find empirical evidence of bank lending channel for Colombia, using a balanced panel data of about four thousand non-financial firms. We find that increases in the interest rate, proxiing for the monetary policy instrument, lead to a reduction in the proportion of bank loans, out of total debt, of the .rms. This bank lending channel amplifies the effect of the traditional interest rate channel, which leads to a reduction in total debt and spending when monetary policy tightens. Our result agrees with, and complements, those obtained by Gómez González and Grosz (2007), who provide evidence of the existence of a bank lending channel in Colombia using bank-specific financial variables.

Suggested Citation

  • José Eduardo Gómez & Paola Morales Acevedo, 2009. "Bank Lending Channel of Monetary Policy: Evidence for Colombia, Using a Firms´ Panel," Borradores de Economia 545, Banco de la Republica de Colombia.
    • Handle: RePEc:bdr:borrec:545
    DOI: 10.32468/be.545
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    References listed on IDEAS

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    Cited by:

    1. International Monetary Fund, 2010. "Colombia: Selected Issues Paper," IMF Staff Country Reports 2010/106, International Monetary Fund.

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    More about this item

    Keywords

    Monetary transmission; bank lending channel; Colombia;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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