The purpose of this paper is to identify the ways in which financial factors may alter the transmission mechanism. In the first part, an example drawn from the "US miracle" in the 1990s highlights these financial factors and the... more
The purpose of this paper is to identify the ways in which financial factors may alter the transmission mechanism. In the first part, an example drawn from the "US miracle" in the 1990s highlights these financial factors and the way in which they were able to operate in the United States and contributed to amplifying the business cycle and also, possibly, macro-financial imbalances. In the second part, we focus on the euro area. On the one hand, during the last 20 years, this area has undergone changes in its financial structures that have made it more similar to English-speaking countries. However, wealth effects remain difficult to spot in the euro area. On the other hand, and again in contrast with English-speaking countries, financial intermediation is stronger there. Credit market flaws are also probably more important, enabling a priori the broad credit channel to play a more prominent role in the euro area to the detriment of typical bank lending or interest rate ch...
