work is licensed under a Creative Commons IGO 3.0 AttributionNonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose, as provided below. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Following a peer review process, and with previous written consent by the Inter-American Development Bank (IDB), a revised version of this work may also be reproduced in any academic journal, including those indexed by the American Economic Association's EconLit, provided that the IDB is credited and that the author(s) receive no income from the publication. Therefore, the restriction to receive income from such publication shall only extend to the publication's author(s). With regard to such restriction, in case of any inconsistency between the Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives license and these statements, the latter shall prevail.Note that link provided above includes additional terms and conditions of the license.The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent.http://www.iadb.org 2017 1 Abstract * This paper evaluates whether fiscal and foreign exchange policy shocks can explain both credit and credit supply in Venezuela. Empirical evidence suggests that between 65 and 90 percent of credit growth is linked to the buildup of banks' deposits caused by the monetary effects of fiscal expansions. For these cases, since credit is provided at equal or reduced interest rates, credit supply takes place. Loan supply can occur either endogenously, when fiscal domestic spending increases with expansionary aggregate supply shocks, or exogenously, when fiscal policy shocks emerge. The role of exogenous fiscal shocks in accounting for credit supply is preponderant in the long run. This evidence suggests fiscal shocks represent a non-conventional bank lending channel. Because this exogenous fiscally-triggered credit supply does not significantly contribute to boosting real activity, its major cost might be associated with high credit volatility. JEL classifications: E5, E63, C32
The associations between macroeconomic fluctuations and the yield curve tend to be explained by the reactions of the monetary authority. This paper evaluates how macroeconomics shocks affect the forward yield curve for domestic and foreign debt markets in Venezuela, where monetary policy is not the main source of macroeconomic fluctuations. As previous results in the literature, macroeconomic shocks affect more strongly the short end of the yield curve in the expected direction. Overall, supply shocks explain most of the variability of long-term yields, spread and volatility. Nonetheless, short-term yield movements can be associated with general monetary conditions of the economy and not necessarily with monetary policy actions.
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