Off-campus UNL users: To download campus access dissertations, please use the following link to log into our proxy server with your NU ID and password. When you are done browsing please remember to return to this page and log out.
Non-UNL users: Please talk to your librarian about requesting this dissertation through interlibrary loan.
Bank credit, money, and monetary policy: Empirical evidence from Korea
Abstract
For the past few decades, one of the intriguing questions in monetary economy has been the effectiveness and the transmission mechanism of monetary policy in influencing the real sector of the economy. In this dissertation, we studied monetary policy procedure, focusing on the influence of bank credit and monetary variables on real economic activity in Korea. Especially, we hypothesize that the disequilibrium bank credit market (due to excess demand) induced by credit rationing is the main source of influences on inflation in Korea. We examined the influences of monetary and credit variables on inflation and real output and the direction of causality for those financial variables. The methodologies used for the empirical research were the regression approach and Granger causality tests. The data used were quarterly Korean data for the period 1973:1 through 1990:4. My results indicate that not only monetary variables but also credit variables, especially current values of narrow credit, have a significant effect in explaining inflation and output changes under the condition of restricted supply of bank credit. These empirical results support our hypothesis that bank credit will affect inflation and output under credit rationing and also support Bernanke's (1986) claim that the money and credit move together to affect output growth. Under the condition of restriction in the supply of bank credit, quantity credit rationing (due to excess demand for loans) proved to be more important than the price rationing mechanism in Korea's case.
Subject Area
Economics|Finance
Recommended Citation
Lee, Gi H, "Bank credit, money, and monetary policy: Empirical evidence from Korea" (1992). ETD collection for University of Nebraska-Lincoln. AAI9225476.
https://digitalcommons.unl.edu/dissertations/AAI9225476