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The Use of Credit Ceilings in the Presence of Indirect Monetary

Author

Listed:
  • Plamen Yossifov

    (International Monetary Fund)

Abstract

In this paper, we introduce credit ceilings in the standard model of the money multiplier and analyze their role in central bank’s management of money supply in the presence of indirect monetary instruments. We show that under a regime of total credit ceilings, their optimal value equals the desired growth rate of the adjusted monetary base. Under a regime of partial credit ceilings, their optimal value depends on the desired growth rate of the adjusted monetary base, the degree of substitutability between the regulated and unregulated types of banks’ earning assets, and the autonomous growth rate of the latter.

Suggested Citation

  • Plamen Yossifov, 2003. "The Use of Credit Ceilings in the Presence of Indirect Monetary," Macroeconomics 0302008, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpma:0302008
    Note: Type of Document - PDF; prepared on IBM PC; to print on PostScript; pages: 17 ; figures: included
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/mac/papers/0302/0302008.pdf
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    More about this item

    Keywords

    credit ceilings selective credit controls money multiplier;

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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