# Why is the credit volatility of the monetary policy that joins the credit growth rate so large? **URL:** \ **Category:** General DSGE Modeling\ **Created:** [10 October 2021 01:58 UTC](https://forum.dynare.org/t/why-is-the-credit-volatility-of-the-monetary-policy-that-joins-the-credit-growth-rate-so-large/19059 "2021-10-10T01:58:26Z")\ **Posts on this page:** 2\ **Page:** 1
**Author:** ![wangshiye](https://forum.dynare.org/letter_avatar_proxy/v4/letter/w/48db29/32.png) [@wangshiye](https://forum.dynare.org/u/wangshiye)\ **Post date:** [10 October 2021 01:58 UTC](https://forum.dynare.org/t/why-is-the-credit-volatility-of-the-monetary-policy-that-joins-the-credit-growth-rate-so-large/19059/1 "2021-10-10T01:58:27Z")
![image](https://forum.dynare.org/uploads/default/original/2X/2/2d08a657c72112a396e9c32a7d8e67070fbcc56a.png) ![image](https://forum.dynare.org/uploads/default/original/2X/1/122633fb8870b10ff69656f2b33b41ebe90e0026.png) I tried to add credit growth to the monetary policy. When I did a welfare analysis and extracted the volatility, I found that the monetary policy that added credit growth had a greater volatility than the Taylor rule. What happened? It’s a little hard to explain. The credit gap volatility of the Taylor rule is 0.3760, and the credit gap volatility of my monetary policy is 0.4960. ---
**Author:** ![jpfeifer](https://forum.dynare.org/user_avatar/forum.dynare.org/jpfeifer/32/5044_2.png) [@jpfeifer](https://forum.dynare.org/u/jpfeifer)\ **Post date:** [10 October 2021 12:45 UTC](https://forum.dynare.org/t/why-is-the-credit-volatility-of-the-monetary-policy-that-joins-the-credit-growth-rate-so-large/19059/2 "2021-10-10T12:45:31Z")
Why is that hard to explain? The Taylor rule is a feedback rule that will influence the behavior of other variables in the model. If credit growth is endogenous that can happen.