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Unconventional monetary policy and the credit channel in the euro area

Lookup NU author(s): Dr Anastasios Evgenidis



This is the authors' accepted manuscript of an article that has been published in its final definitive form by Elsevier B.V., 2019.

For re-use rights please refer to the publisher's terms and conditions.


© 2019 Elsevier B.V.We disentangle credit supply and demand and we then embed this information into a Bayesian threshold VAR model to investigate the importance of the demand channel and the broad credit channel in the transmission of unconventional monetary policy on the macroeconomy during financial stress periods. We find that during such periods, UMP shocks boost aggregate demand for loans, increase agents’ net worth and revitalize credit to firms and households. In addition, counterfactual analysis suggests that non-standard policy measures aiming at stimulating loan demand and relaxing banks’ balance sheet constraints would provide a significant support to economic activity, prices and the financial sector.

Publication metadata

Author(s): Evgenidis A, Salachas E

Publication type: Article

Publication status: Published

Journal: Economics Letters

Year: 2019

Volume: 185

Online publication date: 04/10/2019

Acceptance date: 13/09/2019

Date deposited: 30/10/2019

ISSN (print): 0165-1765

ISSN (electronic): 1873-7374

Publisher: Elsevier B.V.


DOI: 10.1016/j.econlet.2019.108695


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