Financial Innovations, Money Demand, and the Welfare Cost of Inflation

Berentsen, Aleksander; Huber, Samuel; Marchesiani, Alessandro

doi:10.1111/jmcb.12219

Cited by 23 publications

(6 citation statements)

References 53 publications

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“…Berentsen, Menzio, and Wright (2011) also show that introducing credit leads to a downward shift in money demand. Berentsen, Hube, and Marchesiani (2015) argue that credit expansion lowers money demand and suggest that financial innovations can influence household money holding because consumers hold less money by using credit services.…”

Section: Results Of Local Projection Methodsmentioning

confidence: 99%

Credit Expansion and Markups

Chien¹,

Lee²,

Lee³

2022

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Section: Results Of Local Projection Methodsmentioning

confidence: 99%

Credit Expansion and Markups

Chien¹,

Lee²,

Lee³

2022

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“…There is a growing body of information derived from scholarly inquiries that indicates uncertainty has extensive implications for enterprises. It encompasses both political and economic policy uncertainty, as discussed by Berentsen et al (2015), Eidgenössische Steuerverwaltung ESTV (2015), Jordà et al (2015), Kuzin and Schobert (2015), Leamer (2015), and Nyakabawo et al (2015). The prevailing consensus among scholars is that uncertainty exerts a detrimental influence on investment activities.…”

Section: Literature Review 1real Estate Prices and Economic Policymentioning

confidence: 99%

Analyzing the Underlying Relationship Between Monetary Policy and Residential Property Prices in China

Zhou,

Sial,

Álvarez-Otero

et al. 2023

International Journal of Strategic Property Management

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Policymakers and the public express concern regarding the volatility of housing prices due to its potential to increase consumer costs and negatively impact housing affordability. Based on empirical study, it has been seen that the expansion of the real estate sector has a significant impact on the investment in fixed assets by firms. This influence is mostly attributed to the alteration of the transmission of monetary policy. Real estate investment is considered a feasible option because of the significant and rapid appreciation in property prices. The primary objective of this study is to examine the influence of monetary policy on the housing market in China. To conduct the current study, macroeconomic data from a total of 44 time periods, ranging from the fourth quarter of 2012 to the fourth quarter of 2022, was collected. The findings of our study indicate that in the context of China, an expansion in the money supply has a greater propensity to positively influence the borrowing activities of real estate suppliers and clients, as opposed to the supply of properties themselves. The housing market can be influenced by governmental actions such as adjustments to the money supply and interest rates. While scholars have extensively examined the subject matter, the housing market in China remains relatively under-researched in terms of its susceptibility to government macroeconomic policies. Moreover, the current study offers a comprehensive overview of the prevailing challenges encountered by the residential property market in China, emphasizing the significance of macroeconomic policies within this particular context.

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“…Besides better monetary policy, money and credit dynamics have changed as a result of deregulation, financial innovations including common access to ATM cards, the increasing role of money substitutes (Berentsen et al 2015), and financial intermediation growing in complexity in a relatively stable macroeconomic environment characterized by low inflation. Before 1970, banks typically funded their loan growth through monetary liabilities (Schularick and Taylor 2012).…”

Section: The Theoretical Background Of the Decoupling Of Money And Crmentioning

confidence: 99%

“…Ultimately, broad money is nowadays determined by many concomitant interactions and factors which made money supply largely endogenous 1 and mainly driven by economic activity and bank lending. In consequence: (a) the link between money and credit is expected to be looser than in the past, (b) the new demand for money may be explained by the improved access to money markets (Berentsen et al 2015).…”

Section: The Theoretical Background Of the Decoupling Of Money And Crmentioning

confidence: 99%

Money and credit during normal times and house price booms: evidence from time-frequency analysis

Ryczkowski

2019

Empirica

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I analyse the link between money and credit for twelve industrialized countries in the time period from 1970 to 2016. The euro area and Commonwealth Countries have rather strong co-movements between money and credit at longer frequencies. Denmark and Switzerland show weak and episodic effects. Scandinavian countries and the US are somewhere in between. I find strong and significant longer run comovements especially around booming house prices for all of the sample countries. The analysis suggests the expansionary policy that cleans up after the burst of a bubble may exacerbate the risk of a new house price boom. The interrelation is hidden in the short run, because the co-movements are then rarely statistically significant. According to the wavelet evidence, developments of money and credit since the Great Recession or their decoupling in Japan suggest that it is more appropriate to examine the two variables separately in some circumstances.

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Financial Innovations, Money Demand, and the Welfare Cost of Inflation

Cited by 23 publications

References 53 publications

Credit Expansion and Markups

Credit Expansion and Markups

Analyzing the Underlying Relationship Between Monetary Policy and Residential Property Prices in China

Money and credit during normal times and house price booms: evidence from time-frequency analysis

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