Money, credit and cycles: theoretical analyses and applications to the French case.

Summary Monetary factors are considered to be inessential to the explanation of fluctuations by the real cycles current, which places its analysis in a Walrasian framework. Nevertheless, the imperfection of markets potentially gives nominal shocks a role in the short term. The aim here is to enrich the description of the mechanisms by which monetary impulses influence the real economy. The first part is devoted to an examination of the money-credit-product relationship in the cycle. Chapter 1 motivates the need to integrate the financial sphere in the study of monetary transmission. Chapter 2, through a multivariate analysis of the French economy, emphasizes the importance of the real effects of monetary shocks and reveals a mode of transmission through a liquidity effect that is compatible with a credit channel. The second part explicitly integrates the banking system into the model. Chapter 3 evaluates the ability of King and Plosser's model [1984] to account for the observed co-variations between money, credit and product, based on the single set of technology shocks. The simulation of the model, using French data, reveals that the path of integration of money chosen here does not appear to be relevant for basing its influence. To account for the observed liquidity effect, the idea adopted in chapter 4 is that some sectors (firms) are more closely linked to banks than others (households) because of frictions in the credit market. This asymmetry, through composition effects, partly supports a liquidity effect, but is not sufficient to ensure its robustness. The temporal structure of the exchanges appears to be crucial. The last part of the paper explores the model of chapter 4 in greater detail. Chapter 5 proposes an analysis of the cyclical dynamics of the term structure of interest rates and the mechanisms likely to explain its predictive power on inflation activity. In the model, the slope of the yield curve incorporates information on the future evolution of the economy, insofar as it incorporates agents' expectations. Chapter 6 presents a general equilibrium moderation of the strict credit channel. The behavior of banks, through their risk management, amplifies the effects of monetary shocks.