Abstract

RODRIGUEZ NAVA, Abigail  and  VENEGAS MARTINEZ, Francisco. Effects of monetary policy decisions on consumer credit. EconoQuantum [online]. 2015, vol.12, n.2, pp.47-69. ISSN 2007-9869.

This paper proposes a model to examine the effects of monetary policy on banking credit for consumption. The key assumptions are: 1) the monetary authority affects the structure of balance sheets by controlling the rate of interest; 2) the supply of credit is independent of the deposits. The main results are: 1) the use of interest rate as instrument of monetary policy indirectly affects the possibilities of consumer spending, because the commercial banks are forced to change the composition of its assets and liabilities in response to central bank decisions; 2) the demand for assets and liabilities of agents depends mainly on profitability, risk, and correlation between securities. Finally, the proposed model is calibrated to measure the effects of monetary policy on agents’ decisions.

Keywords : Monetary policy; commercial banking; consumers; expense; interest rate.

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