Policy transmission weaker in poorer countries – paper
Authors say disconnect may reflect limited financial inclusion and prevalence of informal credit
New research shows that the responsiveness of households’ and firms’ borrowing costs to monetary policy is stronger in richer countries than in poorer ones.
In a working paper published this month by the US-based National Bureau of Economic Research, Santosh Anagol and Shing-Yi Wang of the University of Pennsylvania study the relationship between interest rates and the actual borrowing costs faced by households and small- and medium-sized enterprises (SMEs). “Our core finding is that the
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