METHODOLOGY OF THE IMPACT OF THE TRANSMISSION MECHANISM BANK CREDIT CHANNEL ON THE ECONOMY

Abstract

In order for the interest rate channel to function effectively, the financial
market must be highly developed and competitive. Also, the financial market should
work efficiently in such a way that the effect of the interest rate change in the
monetary policy on the real economy and the gross domestic product should be
significant. But the financial market has developed slowly in some countries,
including in many cases developing countries, where the impact of interest rate
changes on the real economy is imperceptible. Therefore, the amount of credit, as
well as the price of credit, remain one of the important channels of monetary policy.
In this situation, a new monetary policy channel, that is, the bank credit channel, has
become one of the most common channels