Discuss signi?cance credit channel changing aggregate demand

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1. Discuss why the credit channel is likely to be more important in ?nancially devel- oping economies than in developed ones, and discuss its implications for the choice between the money supply and the interest rate as the appropriate monetary policy instrument.

2. Discuss the signi?cance of the credit channel in changing aggregate demand and output. What limitations, if any, on this signi?cance are imposed by the addition of the expectations-augmented Phillips equation? What limitations, if any, on this signi?cance are imposed by the addition of short-run money neutrality?

Reference no: EM13897702

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