Financial structure and the heterogeneous impact of monetary policy across industries
AbstractThe two general channels by which monetary policy impacts output are the neo-classical cost of capital channel and the credit channel. This paper decomposes the output response to a change in the stance of monetary policy to each of these channels. We use a unique industry level data set that measures the financial characteristics of firms operating at the industry level through time. We bring these financial characteristics formally into the regression analysis, thus allowing for a more precise identification of the two channels. The evidence indicates that both channels are active in the Canadian economy.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economics and Business.
Volume (Year): 61 (2009)
Issue (Month): 1 ()
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Term structure Industry level GDP;
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