The Industry Effects of Monetary Policy in The Euro Area  

Oleh:

Smets, Frank ; Peersman, Gert

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 115 no. 503 (Apr. 2005), page 319-342.
Topik: MONETARY POLICY; industry effects; monetary policy; euro area
Fulltext: 319.pdf (246.21KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: EE28.17 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

We first estimate the effects of a euro area - wide monetary policy change on output growth in eleven industries of seven euro area countries over the period 1980 – 98. On average the negative effect of an interest rate tightening on output is significantly greater in recessions than in booms. There is, however, considerable cross - industry heterogeneity in both the overall policy effects and the degree of asymmetry across the two business cycle phases. We then explore which industry characteristics can account for this cross -industry heterogeneity. Differences in the overall policy effects can mainly be explained by the durability of the goods produced in the sector. This can be regarded as evidence for the conventional interest rate / cost - of - capital channel. In contrast, differences in the degree of asymmetry of policy effects are related to differences in financial structure, in particular the maturity structure of debt, the coverage ratio, financial leverage and firm size. This suggests that financial accelerator mechanisms can partly explain cross - industry differences in asymmetry.

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