Monetary policy has its principle impacts on the economy not by moving the economy from one equilibrium point to the next, like in the textbooks, but by causing sudden, discontinuous changes, or "blackouts," in credit availability.
The ability of smaller, unlisted companies to invest was severely curtailed by a dramatic reduction in credit availability.
Moreover, financial stress is affecting big UK corporates, with CFOs [chief financial officers] reporting the sharpest decline in credit availability since the third quarter of 2008".
Unfortunately any improvement in credit availability is only being felt by 'safe bets', while younger, growing firms continue to struggle to find the finance they need to expand".
Our fear is it will result in less credit availability, which is not what we need in an already tight credit market".
Gross and Souleles (2002) analyzed how consumer debt responded to changes in credit supply.
As I discuss below, there is no correlation between changes in money and changes in credit in Switzerland.
We may see modifications in people's spending and debt habits over the next few years, she said, but it is more likely to be a result of changes in the availability of credit, not a sudden national conversion to thrift.
But I think what we're on, a still-ascending path, in terms of credit availability.
Second, as the increase in spending and credit availability stimulates the economy, tax revenues will increase over time.
