Sunday, November 20, 2016

Channel analysis and monetary- credit macro

Mishkins channels
References Stiglitz paper on rationing credit
Then forgets it

Private banking means
We have
The macro perverse credit cycle
Despite rates and money injection
standards tighten in a crunch contraction
Killing monetary and credit channels

Other assets ?

See farmer for purchasing equity  shooting up the stock market
Will this lead to
A  demand injection
thru animal spirits upper effect spending burst ?

Probably not !

The corporate captains will take the equity boost as gracious extra personal bonus trigger

But still
sit on their hands
No more  outfit spending

Till output demand lifts