IDEAS home Printed from https://ideas.repec.org/a/taf/regstd/v41y2007i6p797-808.html
   My bibliography  Save this article

The Regional Transmission of UK Monetary Policy

Author

Listed:
  • Sheila C. Dow
  • Alberto Montagnoli

Abstract

Dow S. C. and Montagnoli A. (2007) The regional transmission of UK monetary policy, Regional Studies 41, 797-808. Concerns have been raised in the media about a 'one-size-fits-all' monetary policy for the UK. If there are diverse economic conditions in different regions, then a unitary monetary policy cannot suit all. The purpose of this paper is to explore this issue further by breaking it down into two separate issues. First there is the more conventional way of considering the question, in terms of the effect of a particular interest rate change on regions experiencing different economic conditions. This requires a consideration of the nature and causes of regional economic disparities in the UK, and how these might be affected by particular interest rate changes. But there is further the question of how monetary policy is transmitted to the different regions. The possibility is considered that there may be regional differences in how a particular monetary policy is translated into different financial conditions in different regions. In other words there may be a regional dimension to the transmission process itself. The focus here will be on the regional structure of the financial sector and financial behaviour, and in particular the credit market. The argument is explored further with a comparison of Scottish and UK data. Dow S. C. et Montagnoli A. (2007) La transmission au niveau regional de la politique monetaire du Royaume-Uni, Regional Studies 41, 797-808. Les medias ont suscite quelques inquietudes quant a la mise en oeuvre d'une politique monetaire 'unique' au R-U. Tout en remettant en question l'idee selon laquelle un ajustement donne du taux d'interet reflete parfaitement la transmission de la politique monetaire, on considere si, oui ou non, il existe des variations regionales de la transmission de la politique monetaire sous diverses conditions financieres, et donc sous diverses conditions economiques, suivant la region. L'analyse laisse supposer que, tandis que la politique monetaire du R-U pourrait avoir l'impact le plus grand sur les regions centrales a court terme, l'impact le plus durable a long terme se ferait sur les regions peripheriques. Une comparaison des donnees aupres de l'Ecosse et du R-U en fournit quelques preuves. Ecosse R-U Politique monetaire Economies regionales Dow S. C. und Montagnoli A. (2007) Die regionale Ubertragung der britischen W ahrungspolitik, Regional Studies 41, 797-808. In den Medien ist Kritik an einer 'gleichmacherischen' Wahrungspolitik fur Grossbritannien laut geworden. Wir stellen die Annahme in Frage, dass eine gegebene Zinssatzanderung vollstandig wiedergibt, wie Wahrungspolitik ubertragen wird, und ziehen die Moglichkeit in Betracht, dass es regionale Unterschiede dabei geben kann, wie die Wahrungspolitik in verschiedenen Regionen in verschiedene finanzielle (und somit wirtschaftliche) Bedingungen ubersetzt wird. Aus der Analyse geht hervor, dass sich die britische Wahrungspolitik zwar kurzfristig am starksten auf die zentralen Regionen auswirkt, langfristig aber in den peripheren Regionen eine grossere und nachhaltige Wirkung zeigt. Belege hierfur liefert ein Vergleich von Daten aus Schottland und Grossbritannien. Schottland GB Wahrungspolitik Regionalwirtschaften Dow S. C. y Montagnoli A. (2007) La transmision regional de la politica monetaria britanica, Regional Studies 41, 797-808. En el Reino Unido la politica monetaria con un enfoque unico para todos ha suscitado preocupacion en los medios de comunicacion. Cuestionando la suposicion de que un determinado cambio en la tasa de interes refleja totalmente el modo en que se transmite la politica monetaria, consideramos la posibilidad de que podrian existir diferencias regionales en cuanto a como se traduce en diferentes regiones la politica monetaria en distintas condiciones financieras. Este analisis indica que si bien la politica monetaria britanica podria tener a corto plazo una mayor influencia en las regiones centrales, se observa una mayor repercusion sostenida a largo plazo en las regiones perifericas. Como ejemplo comparamos datos escoceses y britanicos. Escocia GB Politica monetaria Economias regionales

Suggested Citation

  • Sheila C. Dow & Alberto Montagnoli, 2007. "The Regional Transmission of UK Monetary Policy," Regional Studies, Taylor & Francis Journals, vol. 41(6), pages 797-808.
    • Handle: RePEc:taf:regstd:v:41:y:2007:i:6:p:797-808
    DOI: 10.1080/00343400601142779
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00343400601142779
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00343400601142779?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Joe Ganley & Chris Salmon, 1997. "The Industrial Impact of Monetary Policy Shocks: Some Stylised Facts," Bank of England working papers 68, Bank of England.
    2. Gabe J. de Bondt, 2000. "Financial Structure and Monetary Transmission in Europe," Books, Edward Elgar Publishing, number 2015.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Degryse, Hans & Matthews, Kent & Zhao, Tianshu, 2018. "SMEs and access to bank credit: Evidence on the regional propagation of the financial crisis in the UK," Journal of Financial Stability, Elsevier, vol. 38(C), pages 53-70.
    2. Sheila Dow & Alberto Montagnoli & Oreste Napolitano, 2012. "Interest Rates and Convergence across Italian Regions," Regional Studies, Taylor & Francis Journals, vol. 46(7), pages 893-905, October.
    3. Ageliki Anagnostou & Stephanos Papadamou, 2012. "The effects of Monetary Policy shocks across the Greek Regions," ERSA conference papers ersa12p507, European Regional Science Association.
    4. Angeliki ANAGNOSTOU & Stephanos PAPADAMOU, 2014. "The Impact Of Monetary Shocks On Regional Output: Evidence From Four South Eurozone Countries," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 39, pages 105-130.
    5. Maurizio La Rocca & Tiziana La Rocca & Alfio Cariola, 2011. "Capital Structure Decisions During a Firm's Life Cycle," Small Business Economics, Springer, vol. 37(1), pages 107-130, July.
    6. Alberto Montagnoli & Jun Nagaysu, 2013. "An investigation of housing affordability in the UK regions," Working Papers 1316, University of Strathclyde Business School, Department of Economics.
    7. de Groot, Oliver & Hauptmeier, Sebastian & Holm-Hadulla, Fédéric & Nikalexi, Katerina, 2020. "Monetary policy and regional inequality," Working Paper Series 2385, European Central Bank.
    8. Steve Cook, 2012. "β-convergence and the Cyclical Dynamics of UK Regional House Prices," Urban Studies, Urban Studies Journal Limited, vol. 49(1), pages 203-218, January.
    9. Eiblmeier, Sebastian, 2023. "Differential Effects of Unconventional Monetary Policy," Hannover Economic Papers (HEP) dp-707, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    10. Masagus M. Ridhwan & Henri L. F. Groot & Piet Rietveld & Peter Nijkamp, 2014. "The Regional Impact of Monetary Policy in Indonesia," Growth and Change, Wiley Blackwell, vol. 45(2), pages 240-262, June.
    11. Korobilis, Dimitris & Gilmartin, Michelle, 2010. "The dynamic effects of U.S. monetary policy on state unemployment," MPRA Paper 27596, University Library of Munich, Germany.
    12. Zan Yang & Shuping Wu & Yanhao Shen, 2017. "Monetary Policy, House Prices, and Consumption in China: A National and Regional Study," International Real Estate Review, Global Social Science Institute, vol. 20(1), pages 23-49.
    13. Martin Sokol & Leonardo Pataccini, 2022. "Financialisation, regional economic development and the coronavirus crisis: a time for spatial monetary policy? [The financialization of home and the mortgage market crisis]," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 15(1), pages 75-92.
    14. John K. Ashton & Andros Gregoriou, 2014. "The Influence of Banking Centralization on Depositors: Regional Heterogeneities in the Transmission of Monetary Policy," Regional Studies, Taylor & Francis Journals, vol. 48(9), pages 1467-1482, September.
    15. Ridhwan, M.M. & Nijkamp, P. & Rietveld, P., 2008. "Regional development and monetary policy : a review of the role of monetary unions, capital mobility and locational effects," Serie Research Memoranda 0007, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. I. Arnold & C.J.M. Kool & K. Raabe, 2005. "New evidence on the firm size effects in US monetary policy transmission," Working Papers 05-11, Utrecht School of Economics.
    2. Ivo J. M. Arnold & Evert B. Vrugt, 2004. "Firm Size, Industry Mix and the Regional Transmission of Monetary Policy in Germany," German Economic Review, Verein für Socialpolitik, vol. 5(1), pages 35-59, February.
    3. K. Raabe & I. Arnold & C.J.M. Kool, 2006. "Firm Size and Monetary Policy Transmission: A Theoretical Model on the Role of Capital Investment Expenditures," Working Papers 06-14, Utrecht School of Economics.
    4. Kilinc, Mustafa & Tunc, Cengiz, 2019. "The asymmetric effects of monetary policy on economic activity in Turkey," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 505-528.
    5. Gregor Bäurle & Elizabeth Steiner & Gabriel Züllig, 2021. "Forecasting the production side of GDP," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 40(3), pages 458-480, April.
    6. Hein, Eckhard & Truger, Achim, 2002. "European Monetary Union: Nominal convergence, real divergence and slow growth? An investigation into the effects of changing macroeconomic policy institutions associated with monetary union," WSI Working Papers 107, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.
    7. Holtemöller, Oliver, 2002. "Further VAR evidence for the effectiveness of a credit channel in Germany," SFB 373 Discussion Papers 2002,66, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    8. Zeyyad Mandalinci, 2015. "Effects of Monetary Policy Shocks on UK Regional Activity: A Constrained MFVAR Approach," Working Papers 758, Queen Mary University of London, School of Economics and Finance.
    9. Mansor H. Ibrahim, 2005. "Sectoral Effects of Monetary Policy: Evidence from Malaysia," Asian Economic Journal, East Asian Economic Association, vol. 19(1), pages 83-102, March.
    10. Calza, Alessandro & Sousa, João, 2005. "Output and inflation responses to credit shocks: are there threshold effects in the euro area?," Working Paper Series 481, European Central Bank.
    11. Dilip M. Nachane & Prasad P. Ranade, 2005. "Relationship banking and the credit market in India: An empirical analysis," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2005-10, Indira Gandhi Institute of Development Research, Mumbai, India.
    12. Masagus M. Ridhwan & Henri L.F. de Groot & Peter Nijkamp, 2010. "The Impact of Monetary Policy on Economic Activity - Evidence from a Meta-Analysis," Tinbergen Institute Discussion Papers 10-043/3, Tinbergen Institute.
    13. Dobronravova, E., 2022. "Industry effects of monetary policy in Russia: Econometric analysis," Journal of the New Economic Association, New Economic Association, vol. 55(3), pages 45-60.
    14. Jan Kakes & Sitikantha Pattanaik, 2000. "The transmission of monetary shocks in the euro area: a V AR analysis based on euro-wide data," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 53(213), pages 171-186.
    15. Eckhard Hein & Achim Truger, 2005. "What ever happened to Germany? Is the decline of the former european key currency country caused by structural sclerosis or by macroeconomic mismanagement?," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(1), pages 3-28.
    16. Joaquin L. Vespignani, 2013. "The Industrial Impact of Monetary Shocks During the Inflation‐Targeting Era in Australia," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 53(1), pages 47-71, March.
    17. Gregor Bäurle & Elizabeth Steiner, 2015. "How do Individual Sectors Respond to Macroeconomic Shocks? A Structural Dynamic Factor Approach Applied to Swiss Data," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 151(III), pages 167-225, September.
    18. Eiji Goto, 2020. "Industry Impacts of Unconventional Monetary Policy," 2020 Papers pgo873, Job Market Papers.
    19. Laura Povoledo, 2009. "The Volatility of the Tradeable and Nontradeable Sectors: Theory and Evidence," Working Papers 0906, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    20. Povoledo, Laura, 2018. "Pricing behavior and the role of trade openness in the transmission of monetary shocks," Journal of Macroeconomics, Elsevier, vol. 57(C), pages 231-247.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:regstd:v:41:y:2007:i:6:p:797-808. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CRES20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.