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The local effects of monetary policy

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  • Neville Francis
  • Michael T. Owyang
  • Tatevik Sekhposyan

Abstract

Previous studies have documented disparities in the regional responses to monetary policy shocks; this variation has been found to depend, in part, on differences in the industrial composition of the regional economies. However, because of computational issues, the literature has often neglected the richest level of disaggregation: the city. In this paper, we estimate the city-level responses to monetary policy shocks in a Bayesian VAR. The Bayesian VAR allows us to model the entire panel of metropolitan areas through the imposition of a shrinkage prior. We then seek the origin of the city-level asymmetric responses.

Suggested Citation

  • Neville Francis & Michael T. Owyang & Tatevik Sekhposyan, 2009. "The local effects of monetary policy," Working Papers 2009-048, Federal Reserve Bank of St. Louis.
    • Handle: RePEc:fip:fedlwp:2009-048
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    Cited by:

    1. de Groot, Oliver & Hauptmeier, Sebastian & Holm-Hadulla, Fédéric & Nikalexi, Katerina, 2020. "Monetary policy and regional inequality," Working Paper Series 2385, European Central Bank.
    2. repec:fgv:epgrbe:v:65:n:4:a:6 is not listed on IDEAS
    3. Ray, Sourav & Snir, Avichai & Levy, Daniel, 2023. "Retail Pricing Format and Rigidity of Regular Prices," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 1-1.
    4. Chadi S. Abdallah & William D. Lastrapes, 2013. "Evidence on the Relationship between Housing and Consumption in the United States: A State‐Level Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(4), pages 559-590, June.
    5. Ioannides, Yannis M., 2018. "A DMP model of intercity trade," Labour Economics, Elsevier, vol. 50(C), pages 97-111.
    6. Danilo Leiva-Leon, 2017. "Measuring Business Cycles Intra-Synchronization in US: A Regime-switching Interdependence Framework," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(4), pages 513-545, August.
    7. Igor Ézio Maciel Silva, 2016. "The Differential Regional Effects Of Monetary And Fiscal Policies In Brazil," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 040, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    8. Bruno Albuquerque & Martin Iseringhausen & Frederic Opitz, 2024. "The Housing Supply Channel of Monetary Policy," IMF Working Papers 2024/023, International Monetary Fund.
    9. Rocha, Roberta de Moraes & da Silva, Marcelo Eduardo Alves & Gomes, Sonia Maria Fonseca Pereira Oliveira, 2011. "Por que os estados brasileiros têm reações assimétricas a choques na política monetária?," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 65(4), November.

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    Vector autoregression; Econometric models;

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