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Regional Effects of Monetary Policy in the Netherlands

Author

Listed:
  • Ivo J. M. Arnold

    (Center for Finance, Universiteit Nyenrode, The Netherlands)

  • Evert B. Vrugt

    (Center for Finance, Universiteit Nyenrode, The Netherlands)

Abstract

This paper measures the impact of monetary policy shocks on regional and sectoral output in the Netherlands for the period 1973 to 1993. We document large regional and sectoral variation in monetary policy transmission. Our results support previous findings that the differential regional effects of monetary policy are significantly related to industrial composition. We also find that sectoral effects account for much more of the variation in interest sensitivity than regional effects. Finally, we explore whether sectors which react more strongly to interest rate shocks are compensated by higher returns.

Suggested Citation

  • Ivo J. M. Arnold & Evert B. Vrugt, 2002. "Regional Effects of Monetary Policy in the Netherlands," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 1(2), pages 123-134, August.
  • Handle: RePEc:ijb:journl:v:1:y:2002:i:2:p:123-134
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    References listed on IDEAS

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    1. Ben S. Bernanke & Mark Gertler, 1995. "Inside the Black Box: The Credit Channel of Monetary Policy Transmission," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 27-48, Fall.
    2. Joe Ganley & Chris Salmon, 1997. "The Industrial Impact of Monetary Policy Shocks: Some Stylised Facts," Bank of England working papers 68, Bank of England.
    3. Eric M. Leeper & Christopher A. Sims & Tao Zha, 1996. "What Does Monetary Policy Do?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(2), pages 1-78.
    4. Eijffinger, Sylvester & Haan, Jakob de, 2000. "European Monetary and Fiscal Policy," OUP Catalogue, Oxford University Press, number 9780198776161.
    5. J.M. Arnold, Ivo, 2001. "The Regional Effects of Monetary Policy in Europe," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 16, pages 399-420.
    6. John B. Taylor, 1995. "The Monetary Transmission Mechanism: An Empirical Framework," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 11-26, Fall.
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    Citations

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    Cited by:

    1. Todd Potts & David Yerger, 2010. "Variations Across Canadian Regions in the Sensitivity to U.S. Monetary Policy," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 38(4), pages 443-454, December.
    2. Vespignani, Joaquin L., 2011. "On the differential impact of monetary policy across states/territories and its determinants in Australia: Evidence and new methodology from a small open economy," MPRA Paper 44998, University Library of Munich, Germany.
    3. Singh, Sunny Kumar & Rao, D. Tripati, 2014. "Sectoral effects of monetary policy shock: evidence from India," MPRA Paper 62069, University Library of Munich, Germany.
    4. Yang, Zan & Wang, Songtao & Campbell, Robert, 2010. "Monetary policy and regional price boom in Sweden," Journal of Policy Modeling, Elsevier, vol. 32(6), pages 865-879, November.
    5. 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.
    6. Ageliki Anagnostou & Stephanos Papadamou, 2012. "The effects of Monetary Policy shocks across the Greek Regions," ERSA conference papers ersa12p507, European Regional Science Association.
    7. 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.
    8. Tasneem Alam & Muhammad Waheed, 2006. "Sectoral Effects of Monetary Policy: Evidence from Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(4), pages 1103-1115.
    9. Todd Potts & David Yerger, 2007. "Changes over Time in New York State's Responsiveness to Monetary Shocks," New York Economic Review, New York State Economics Association (NYSEA), pages 3-17.
    10. Alam, Tasneem & Waheed, Muhammad, 2006. "The monetary transmission mechanism in Pakistan: a sectoral analysis," MPRA Paper 2719, University Library of Munich, Germany, revised 13 Apr 2007.
    11. Vespignani, Joaquin L., 2015. "On the differential impact of monetary policy across states/territories and its determinants in Australia: Evidence and new methodology from a small open economy," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 34(C), pages 1-13.

    More about this item

    Keywords

    monetary transmission; sectoral effects; regional effects;

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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