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Helder Ferreira de Mendonça and Vitor R. C. Britto
 
''Interest rate and credit channel for households and firms: Evidence from a large emerging economy''
( 2017, Vol. 37 No.1 )
 
 
This study analyzes the effect of the monetary policy interest rate on the credit channel taking into account disaggregated information for households and firms under inflation targeting. Based on aggregate data of the Brazilian economy for the period 2001-2015, this article addresses empirical evidence regarding the impact of the interest rate on credit granted and the credit spread. The results indicate that there is a negative effect of the interest rate on credit granted to firms and that, in the case of credit spread, there is a positive impact on both households and firms. The magnitude of the effect of the interest rate on credit granted to firms is greater than that observed for households. In contrast, the magnitude of the effect of the interest rate on the credit spread is lower for firms when compared to households.
 
 
Keywords: interest rate, credit channel, households, legal entities, inflation targeting.
JEL: E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General
 
Manuscript Received : Aug 03 2016 Manuscript Accepted : Mar 29 2017

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