December 17, 2008 at 11:04 AM EST
Low Credit Level Does Not Harm Monetary Policy Effectiveness
A low level of credit in a country does not appear to hinder the effectiveness of monetary policy in controlling inflation, a new working paper published by the International Monetary Fund finds. Rather, exchange rate flexibility is a more important factor. Monetary policy, at least in part, operates through both an interest rate and credit channel, [...]
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