TY - JOUR ID - 69096 TI - The Monetary Policy, Credit Constraint and Spatial Distribution of Economic Activity: A Contribution of New Economic Geography JO - Iranian Economic Review JA - IER LA - en SN - 1026-6542 AU - Jafari Samimi, Ahmad AU - Rasekhi, Saeed AU - Asadi, Seyed Peyman AD - Faculty of Economics & Administrative Sciences, University of Mazandaran, Babolsar, Iran Y1 - 2019 PY - 2019 VL - 23 IS - 1 SP - 1 EP - 27 KW - Keywords: Monetary Policy KW - Credit Constraint KW - Agglomeration KW - dispersion KW - Spatial Panel Data KW - Dynamic Panel Data KW - Iran. JEL Classification: E52 KW - E51 KW - E44 KW - R11 DO - 10.22059/ier.2018.69096 N2 - T his paper investigates the effect of monetary policy on the distribution of economic activity and agglomeration economies within a country. The considered channel for this effectiveness is the availability of credit to firms in various regions and the effects on the labor and consumer welfare. For this purpose, data for manufacturing firms located in 30 different provinces in Iran during 2007 and 2014 gathered. The empirical results from spatial panel data show that beside conventional channel of effectiveness through consumer and labor force utility function, regional monetary policy implication through uneven distribution of regional loanable banking fund seems to be substantial centripetal force. In terms of most well-known NEG variable, uneven regional accessibility of credit market has opposite regional implication as trade freeness. While the former leads to more concentration of economic activity across space, the latter tends to drive dispersion. It is assumable that monetary policy reduce the impact of credit constraints on firms but the degree of credit availability in regions is a significant driver for concentration of economic activity. The result shows the importance of accessibility to banking loans on distribution of economic activities within the country.   UR - https://ier.ut.ac.ir/article_69096.html L1 - https://ier.ut.ac.ir/article_69096_63213af5d09fbe021cd5407697717e30.pdf ER -