Edited by Louis-Philippe Rochon and Sergio Rossi
Chapter 5: New insights on the money-supply-endogeneity debate and the new ‘equity’ multiplier: some evidence from the euro area
This chapter extends the horizontalist–structuralist debate about the money-supply process, taking into consideration the restrictions that emerged during the Basel III agreements. A two-step approach is proposed: first, the existence of a new ‘equity credit multiplier’ is examined, that is, the importance of banks’ equity in their lending process. Then, this ‘equity effect’ is embedded into a multivariate loan model. By applying this two-step approach to the euro area, the chapter concludes that there are strong empirical indications of money endogeneity in the system with a reversed ‘equity credit multiplier’.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.