The bank lending channel of monetary policy: identification and estimation using Portuguese micro bank data

α₃λ₁         α₅λ₃ - α₃λ₂      α₄λ₃ - α₃λ₄

31        53  32       43  34

45

λ₃- α₃          λ₃- α₃           λ₃- α₃

(+)                     (-)                  (?)

Finally substituting (A1.5) and (A1.6) into (A1.9) and (A1.10) we get the reduced
form equations for l_t and ln(C / P)_t . The reduced form for ln(C / P)_t , which is
equation (4.2) in the main text, reads as:

^ln(C / P) = ^θ0 ⁺ θι lⁿ y_t ^{+ θ}2 lⁿ y_tzt ^{+ θ}3r_t ^{+ θ}4r_tz_u

(?)      (-)         (?)   (+)

+ θ₅π_t + θ₆π_tz_it + θ₇ ln(R / P) + θ₈ ln(R / P)z_t + θ₉z_t
(?)   (+)       (?)           (-)              (?)

where

^αi^λ3^βi^γ 3 ^λι^α 3(^β3 ^γ 3) ^βι(^α 4 ^λ3 ^α 3^λ4)
(^λ3^{- α} 3)(^β3^- γ 3)

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