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Monetary Policy Impulses, Local Output and the Transmission Mechanism

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  • Massimo Caruso

    () (Bank of Italy)

Abstract

This paper evaluates the effects of unanticipated monetary policy shocks on Italian output on the basis of highly disaggregated data and a VAR methodology. The impact of unexpected changes in the money market interest rate on the pattern of industrial production – based on qualitative business opinion survey data – has been computed for 164 local industries. The perceived output effects of monetary impulses go up for local industries with higher investment expenditures and less liquid firms. The hypothesis that small firms bear a disproportionate burden of monetary policy does not find support in this sample.

Suggested Citation

  • Massimo Caruso, 2006. "Monetary Policy Impulses, Local Output and the Transmission Mechanism," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 65(1), pages 1-30, May.
  • Handle: RePEc:gde:journl:gde_v65_n1_p1-30
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    References listed on IDEAS

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    More about this item

    Keywords

    monetary policy shocks; business opinion surveys; heterogeneity;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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