Examining the Effect of Bank Loans and Credits in the Transmission Mechanism and Intensity of Monetary Policy Impact on Iran’s Macroeconomic Variables
Keywords:
Bank loans and credits, transmission mechanism, monetary policy impact intensity, Bayesian Vector Autoregression modelAbstract
This study investigates the role and impact of monetary policy in response to an external shock on the real sector of the economy and the banking system. The research examines to what extent the government can respond appropriately through the implementation of monetary policy via the (commercial) banking network. In this regard, the profitability status of the banking network, as one of the target variables in the aftermath of economic shocks—an issue rarely addressed in previous studies—is taken into account. The main objective of this study is to examine the effect of bank loans and credits in the transmission mechanism and the intensity of monetary policy impact on Iran’s macroeconomic variables. The statistical sample of the study includes data from Bank Mellat, Tejarat Bank, Sepah Bank, Refah Bank, Bank Melli, and Bank Saderat for the period from the first quarter of 2016 to the second quarter of 2022. To analyze the data, the Bayesian Vector Autoregression (BVAR) model was employed. The results showed that the total bank loans and credits are among the significant financial factors influencing the transmission mechanism and the intensity of monetary policy impact on Iran’s macroeconomic variables.
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Copyright (c) 2025 Bahareh Mansoorsadeghigilani, Karim Emami, Ebrahim Rezaee (Author)
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