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Loose monetary policy and firm uncertainty

Author

Listed:
  • Chong-Chuo Chang

    (National Chi Nan University)

  • Kuen-Shiou Yang

    (Dharma Drum Institute of Liberal Arts)

Abstract

The central banks of several countries have adopted loose monetary policies to boost their economies during periods of financial crisis. The positive and negative impacts of these policies warrant investigation. We select firms from various countries as samples for an empirical study covering a 26-year period from 1985 to 2015; the countries include the United States, Japan, the United Kingdom, and various Eurozone members (i.e., Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, and Spain). The results indicate that the adoption of loose monetary policies mitigated firms’ short-term future uncertainty in the United States, Japan, and the Eurozone countries but increased such uncertainty in the United Kingdom.

Suggested Citation

  • Chong-Chuo Chang & Kuen-Shiou Yang, 2021. "Loose monetary policy and firm uncertainty," SN Business & Economics, Springer, vol. 1(3), pages 1-27, March.
    • Handle: RePEc:spr:snbeco:v:1:y:2021:i:3:d:10.1007_s43546-021-00040-1
    DOI: 10.1007/s43546-021-00040-1
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    More about this item

    Keywords

    Firm uncertainty; Monetary policy; Quantitative easing; Outright monetary transactions;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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