Fed policy’s global effects differ in booms and busts – BIS paper
Monetary policy appears to impact global bank lending differently depending on the “regime”
US monetary policy impacts global bank lending differently depending on whether lending is in a “boom” or a “stagnation” regime, research published by the Bank for International Settlements finds.
The working paper by Stefan Avdjiev and Galina Hale notes some researchers have found a positive relationship between global bank lending and the federal funds rate, and others a negative relationship.
To solve this puzzle, they divide lending into boom and stagnation regimes. They also split the
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