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Financial Systems and the Cost Channel Transmission of Monetary Policy Shocks

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  • Johann Scharler

    (Oesterreichische Nationalbank)

  • Sylvia Kaufmann

    (Oesterreichische Nationalbank)

Abstract

In this paper we study the role of financial systems for the cost channel transmission of monetary policy in a calibrated business cycle model. We analyze the different effects that monetary policy has on the economy, in particular on output and inflation, which are due to differences in country-specific financial systems. For a plausible calibration of the model, differences in financial systems have a rather limited effect on the transmission mechanism and do not appear to give rise to cross country differences in the strength of the cost channel

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Bibliographic Info

Paper provided by Money Macro and Finance Research Group in its series Money Macro and Finance (MMF) Research Group Conference 2006 with number 67.

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Date of creation: 02 Feb 2007
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Handle: RePEc:mmf:mmfc06:67

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Web page: http://www.essex.ac.uk/afm/mmf/index.html

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Keywords: Financial Systems; Cost Channel; Transmission Mechanism;

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Citations

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Cited by:
  1. Giuseppe Ciccarone & Francesco Giuli & Danilo Liberati, 2012. "The effects of monetary policy shocks in credit and labor markets with search and matching frictions," Working Papers 151, University of Rome La Sapienza, Department of Public Economics.
  2. repec:onb:oenbwp:y::i:164:b:1 is not listed on IDEAS
  3. Pierre-Richard Agenor & Koray Alper, 2009. "Monetary Shocks and Central Bank Liquidity with Credit Market Imperfections," Working Papers 0906, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  4. Ciccarone, Giuseppe & Giuli, Francesco & Liberati, Danilo, 2014. "Incomplete interest rate pass-through under credit and labor market frictions," Economic Modelling, Elsevier, vol. 36(C), pages 645-657.
  5. Giuli, Francesco & Tancioni, Massimiliano, 2012. "Real rigidities, productivity improvements and investment dynamics," Journal of Economic Dynamics and Control, Elsevier, vol. 36(1), pages 100-118.
  6. Kilponen , Juha & Milne, Alistair, 2007. "The lending channel under optimal choice of monetary policy," Research Discussion Papers 33/2007, Bank of Finland.
  7. Pierre-Richard Agénor & Karim El Aynaoui, 2008. "Excess Liquidity, Bank Pricing Rules, and Monetary Policy," Centre for Growth and Business Cycle Research Discussion Paper Series 105, Economics, The Univeristy of Manchester.
  8. Tayler, William & Zilberman, Roy, 2014. "Macroprudential Regulation and the Role of Monetary Policy," EconStor Preprints 95230, ZBW - German National Library of Economics.
  9. Ida, Daisuke, 2014. "Role of financial systems in a sticky price model," Journal of Economics and Business, Elsevier, vol. 72(C), pages 44-57.
  10. Malikane, Christopher, 2012. "Inflation dynamics and the cost channel in emerging markets," MPRA Paper 42688, University Library of Munich, Germany.
  11. Meixing Dai & Qiao Zhang, 2013. "Central bank transparency with the cost channel," Working Papers of BETA 2013-06, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
  12. Scharler, Johann & Kwapil, Claudia, 2006. "Limited Pass-Through from Policy to Retail Interest Rates: Empirical Evidence and Macroeconomic Implications," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 26–36.
  13. Francesco Giuli & Massimiliano Tancioni, 2009. "Firm-Specific Capital, Productivity Shocks and Investment Dynamics," Working Papers 120, University of Rome La Sapienza, Department of Public Economics.

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