NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

State-run Banks, Money Growth, and the Real Economy

Randall Morck, M. Deniz Yavuz, Bernard Yeung

NBER Working Paper No. 19004
Issued in April 2013, Revised in February 2018
NBER Program(s):Corporate Finance

Within countries, state-run banks’ lending correlates with prior money growth; otherwise similar private-sector banks’ lending does not. Aggregate credit and investment growth correlate with prior money growth more where banking systems are more state-run. Size and liquidity differences between state-run and private-sector banks do not drive these results; further tests discount broad classes of alternative explanations. Tests exploiting heterogeneity in likely political pressure on state-run banks associated with privatizations and elections suggest a command-and-control pseudo-monetary policy channel: changes in money growth, perhaps reflecting political pressure on the central bank, change banks’ lending constraints; political pressure actually changes state-run banks’ lending.

download in pdf format
   (808 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w19004

Users who downloaded this paper also downloaded* these:
Autor, Dorn, and Hanson w18938 Untangling Trade and Technology: Evidence from Local Labor Markets
Bruno and Shin w18942 Capital Flows and the Risk-Taking Channel of Monetary Policy
Landier, Sraer, and Thesmar w18857 Banks' Exposure to Interest Rate Risk and The Transmission of Monetary Policy
Baker and Wurgler w19018 Do Strict Capital Requirements Raise the Cost of Capital? Banking Regulation and the Low Risk Anomaly
Deng, Morck, Wu, and Yeung w16871 Monetary and Fiscal Stimuli, Ownership Structure, and China's Housing Market
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us