Investigating the asymmetric impact of monetary shocks on bank credits during business periods: (Serious Keynesian Perspective Test)

Monetary policy is one way of controlling economic fluctuations, and in recent years, developing countries (including Iran) have been particularly concerned with policymaking. For this reason, it is necessary to consider how these policies will affect the Iranian economy and its variables. It should also be examined whether the existence of inflationary conditions in the Iranian economy can have an impact on the performance of monetary policy. Therefore, the present study was conducted to investigate the effect of monetary policy on bank credit during commercial periods, (seasonal data during 1997-1999) using a smooth transition regression model. According to the results, when economic growth in Iran exceeds 3.62 percent, regime change will occur, and the estimated slope parameter is 8.58, indicating a moderate adjustment rate from the first regime to the second regime. Economic growth as a threshold variable has a positive and significant effect on bank credit. In other words, the results show that in Iran monetary policy will have a different impact on bank lending given different levels of economic growth (stagnation or boom). Results have shown that whenever the economic growth in Iran exceeds 3.62 %, with a moderate adjustment speed of 8.58, a change in the regime will occur and the economic growth will have positive and significant impact on banking credits as a threshold variable. Likewise, according to monetary policy results any recession or prosperity in economic growth will have various effects on granted banking credits, based on its different levels. Also, monetary policy in both regimes has a positive and significant effect on economic growth, but this effect has decreased in the second regime compared to the first regime. The results show that, during the recession the banks' lending power was low due to the financial crisis and therefore limited access. People on loans will increase the impact of monetary policy during the recession rather than the boom period. It is therefore necessary for monetary policy makers to consider trade cycles when applying monetary policy.