Macroeconomic uncertainty and bank lending

In the new CAMP working paper 05/2022, Juelsrud and Larsen investigate the impact of macro-related uncertainty on bank lending in Norway. They show that an increase in general macroeconomic uncertainty reduces bank lending. Importantly, however, they show that this effect is largely driven by monetary policy uncertainty, suggesting that uncertainty about the monetary policy stance is key for understanding why macro-related uncertainty impacts bank lending.