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The Monetary Transmission Mechanism: Evidence from the Industry Data of Five OECD Countries

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  • Luca Dedola

    (Banca d'Italia)

  • Francesco Lippi

    (Banca d'Italia)

Abstract

This paper collects new evidence on the monetary transmission mechanism. This evidence is obtained from the study of the effects that unexpected monetary policy shocks exert on the activity of the manufacturing sectors in 5 OECD countries (France, Germany, Italy, UK and USA). The goal is twofold. First, to document the cross-industry heterogeneity of monetary policy effects. Second, to explain this heterogeneity in terms of some industry characteristics which are suggested by theory. The results highlight a wide variation of the policy effects across industries. It is shown that these differences can be partly explained by industrial features pointed to both by the interest rate channel (e.g. the durability of the output produced in each industry) and by the credit channel (e.g. the borrowing capacity of firms').

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 1833.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:1833

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  1. Bernanke, Ben S. & Mihov, Ilian, 1995. "Measuring Monetary Policy," Economics Series 10, Institute for Advanced Studies.
  2. Helg, Rodolfo & Manasse, Paolo & Monacelli, Tommaso & Rovelli, Riccardo, 1995. "How much (a)symmetry in Europe? Evidence from industrial sectors," European Economic Review, Elsevier, vol. 39(5), pages 1017-1041, May.
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  17. Lucas, Robert Jr., 1990. "Liquidity and interest rates," Journal of Economic Theory, Elsevier, vol. 50(2), pages 237-264, April.
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Citations

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Cited by:
  1. Paul Mizen & Cihan Yalcin, 2006. "Monetary Policy, Corporate Financial Composition and Real Activity," Working Papers 0601, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  2. Ghosh, Saibal, 2009. "Industry Effects of Monetary Policy: Evidence from India," MPRA Paper 17307, University Library of Munich, Germany.
  3. Magdalena Morgese Borys & Roman Horváth, 2007. "The Effects of Monetary Policy in the Czech Republic: An Empirical Study," Working Papers IES 2007/26, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Oct 2007.
  4. Chi, Li-Chiu, 2009. "Contagion and competitive effects of plan confirmation of reorganization filings: Evidence from the Taiwan Stock Market," Economic Modelling, Elsevier, vol. 26(2), pages 364-369, March.
  5. Andreas Worms, 2003. "Interbank Relationships and the Credit Channel in Germany," Empirica, Springer, vol. 30(2), pages 179-198, June.
  6. Fabio Bagliano & Alessandro Sembenelli, 2004. "The cyclical behaviour of inventories: European cross-country evidence from the early 1990s recession," Applied Economics, Taylor & Francis Journals, vol. 36(18), pages 2031-2044.
  7. Worms, Andreas, 2001. "The reaction of bank lending to monetary policy measures in Germany," Working Paper Series 0096, European Central Bank.
  8. Mojon, Benoît & Kashyap, Anil K. & Angeloni, Ignazio & Terlizzese, Daniele, 2002. "Monetary Transmission in the Euro Area : Where Do We Stand?," Working Paper Series 0114, European Central Bank.
  9. Peersman, Gert & Smets, Frank, 2002. "The industry effects of monetary policy in the euro area," Working Paper Series 0165, European Central Bank.
  10. repec:onb:oenbwp:y:2006:i:1:b:1 is not listed on IDEAS
  11. Matteo Ciccarelli & Alessandro Rebucci, 2002. "The Transmission Mechanism of European Monetary Policy," IMF Working Papers 02/54, International Monetary Fund.
  12. I. Arnold & C.J.M. Kool & K. Raabe, 2005. "The determinants of the industry effects of US monetary policy," Working Papers 05-11, Utrecht School of Economics.

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