Date of Award

1-1-2001

Thesis Type

Masters

Document Type

Thesis

Divisions

Faculty of Business and Economics

Department

-

Institution

Universiti Malaya

Abstract

Credit-lending channel Is an alternative view on how the shift in monetary policy is translated into the change in loans and output. Nevertheless, this paper finds that the evidence on the existence of a distinctive credit-lending channel In the Malaysian economy is absent. Firstly, the episodes of tight monetary policy In the 1990s are Identified using the "narrative approach". Then, a preliminary analysis Is done to see the impact of tight monetary policy on banks' credit supply. It Is found that bank loans only decline In the most recent monetary tightening, September 1997 to August 1998. Next, an empirical analysis Is conducted to show the behaviour of money and loans following the focal episodes. After that, a comparison of the money-output and loans-output relationship In the focal episodes relative to usual Is undertaken to see the relative importance of both channels in the economy. The findings indicate that the money-output link Is stronger during the focal episodes compared to usual. In contrast, the loans-output relationship shows no deviation from its usual path, during the periods of monetary tightening. Taken together, the results lend little support to the existence of a distinctive credit-lending channel in the Malaysian economy.

Initial

snms

Additional Information

Dissertation (M.A) -- Faculty of Business and Economics, Universiti Malaya, 2001.

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