Research on the Microfoundations of the Monetary Transmission Mechanism under Financial Friction Conditions

Author: Jiang Guan
Publisher:
Publish Date: 2006-07-01
Features: The monetary transmission mechanism is the channel of a country's monetary financial movement and the path through which policy regulation operates. It holds decisive significance for the selection of monetary policy objectives, adjustment methods, and policy effects. Its complexity and uncertainty pose challenges for academic research and policy practice. Based on a systematic review of theoretical and empirical literature on the monetary transmission mechanism, this book employs the analytical methods of information economics to attempt to unravel the black box of the monetary transmission process. It delves into the microfoundations of the monetary transmission mechanism at the levels of banks and enterprises, and further analyzes how these microfactors transmit to the macro level, i.e., how they lead to credit cycles, excessive persistent fluctuations, and distributive effects in the macroeconomy, as well as how to grasp the inherent uncertainties in the effects of macro monetary policy in policy practice.