Statistical analysis of the correlation between monetary policy regimes and corporate lending rates

Анотація

Corporate lending rates have a significant impact on investment and the overall economy. In order to influence rates, the authorities pursue their own economic policy. One of these is monetary policy. In recent decades, an increasing number of countries have been modernizing their monetary policies to achieve their inflation and economic growth targets.The paper is devoted to the analysis of monetary policy (MP) regimes impact on corporate lending rates. The objective of the study is to confirm or reject three hypotheses. Each of the hypotheses is related to a specific aspect of the research topic, specifically, the differences between countries in terms of corporate lending rates and inflation, and the link between the above indicators. As part of the methodological component, the paper uses, firstly, regression equations to analyze the relationship between the variables of inflation and lending rates, and secondly, statistical analysis of selected indicators. The main result of the paper is the verification of all three hypotheses and the conclusion that the most effective monetary policy regime that would provide the lowest and least volatile corporate loan rates is the flexible inflation targeting regime. Therefore, in order to minimize corporate rates, the central regulator of a country that already implements inflation targeting (IT) should adopt a flexible inflation targeting regime. For countries with alternative monetary policy regimes, it would be more optimal to implement inflation targeting initially, and then modify it in a flexible IT, because flexible inflation targeting requires a prior proven track record in implementing classical IT.

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