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Heterogeneity in Monetary Transmission: Sectoral and Regional Effects

  • Héctor F. Bravo
  • Carlos J. García
  • Verónica Mies
  • Matías Tapia

Different studies have analyzed monetary transmission in Chile, and the effects of monetary policy on aggregate macroeconomic variables. However, valuable information, relevant for the design and management of monetary policy, can be obtained in a more specific analysis of the impact of monetary shocks on the components of aggregate activity. Thus, this paper studies the disaggregate effects of monetary policy, distinguishing among three different classifications: private spending (consumption and investment), economic sectors and regional unemployment. The paper finds significant differences in the disaggregate impact (both in size and length) of monetary shocks. In most cases, these differences are consistent with the theoretical implications of traditional monetary transmission channels.

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Paper provided by Central Bank of Chile in its series Working Papers Central Bank of Chile with number 235.

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Date of creation: Oct 2003
Date of revision:
Handle: RePEc:chb:bcchwp:235
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  1. Bernanke, Ben S & Blinder, Alan S, 1992. "The Federal Funds Rate and the Channels of Monetary Transmission," American Economic Review, American Economic Association, vol. 82(4), pages 901-21, September.
  2. Peter C.B. Phillips, 1995. "Impulse Response and Forecast Error Variance Asymptotics in Nonstationary VAR's," Cowles Foundation Discussion Papers 1102, Cowles Foundation for Research in Economics, Yale University.
  3. Calvo, Guillermo A., 1983. "Staggered prices in a utility-maximizing framework," Journal of Monetary Economics, Elsevier, vol. 12(3), pages 383-398, September.
  4. Ben S. Bernanke & Ilian Mihov, 1998. "Measuring Monetary Policy," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 869-902, August.
  5. repec:fda:fdaddt:99-14 is not listed on IDEAS
  6. Hayo, Bernd & Uhlenbrock, Birgit, 1999. "Industry effects of monetary policy in Germany," ZEI Working Papers B 14-1999, ZEI - Center for European Integration Studies, University of Bonn.
  7. Christopher J. Erceg & Andrew T. Levin, 2002. "Optimal Monetary Policy with Durable and Non-Durable Goods," Computing in Economics and Finance 2002 343, Society for Computational Economics.
  8. Frederic S. Mishkin, 1995. "Symposium on the Monetary Transmission Mechanism," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 3-10, Fall.
  9. Mark Gertler & Simon Gilchrist, 1993. "The role of credit market imperfections in the monetary transmission mechanism: arguments and evidence," Finance and Economics Discussion Series 93-5, Board of Governors of the Federal Reserve System (U.S.).
  10. Robert Barsky & Christopher L. House & Miles Kimball, 2003. "Do Flexible Durable Goods Prices Undermine Sticky Price Models?," NBER Working Papers 9832, National Bureau of Economic Research, Inc.
  11. Christopher A. Sims, 1986. "Are forecasting models usable for policy analysis?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Win, pages 2-16.
  12. Jean Farès & Gabriel Srour, 2001. "The Monetary Transmission Mechanism at the Sectoral Level," Working Papers 01-27, Bank of Canada.
  13. Lee E. Ohanian & Alan C. Stockman & Lutz Kilian, 1994. "The effects of real and monetary shocks in a business cycle model with some sticky prices," Proceedings, Federal Reserve Bank of Cleveland, pages 1209-1240.
  14. Rodrigo Díaz & Andrés Pardo & Patricio Meller, 2002. "Análisis económico-descriptivo de las regiones chilenas," Documentos de Trabajo 133, Centro de Economía Aplicada, Universidad de Chile.
  15. Gerald A. Carlino & Robert H. DeFina, 1994. "Does monetary policy have differential regional effects?," Working Papers 94-23, Federal Reserve Bank of Philadelphia.
  16. Rodrigo Alfaro & Helmut Franken & Carlos García & Alejandro Jara, 2003. "Bank Lending Channel and the Monetary Transmission Mechanism: the Case of Chile," Working Papers Central Bank of Chile 223, Central Bank of Chile.
  17. Raul Ramos Lobo & Miguel Juan Clar Lopez & Jordi Surinach Caralt, 2002. "Efectos regionales de la politica monetaria: implicaciones para los paises de la zona euro," Working Papers in Economics 76, Universitat de Barcelona. Espai de Recerca en Economia.
  18. Joe Ganley & Chris Salmon, 1997. "The Industrial Impact of Monetary Policy Shocks: Some Stylised Facts," Bank of England working papers 68, Bank of England.
  19. Verónica Mies & Felipe Morandé & Matías Tapia, 2002. "Política Monetaria y Mecanismos de Transmisión: Nuevos Elementos para una Vieja Discusión," Working Papers Central Bank of Chile 181, Central Bank of Chile.
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