The industry effects of monetary policy in the euro area
We first estimate the effects of an euro area-wide monetary policy change on output growth in eleven industries of seven euro area countries over the period 1980-1998. On average the negative effect of an interest rate tightening on output is significantly greater in recessions than in booms. There is, however, considerable cross-industry heterogeneity in both the overall policy effects and the degree of asymmetry across the two business cycle phases. We then explore which industry characteristics can account for this cross-industry heterogeneity. Differences in the overall policy effects can mainly be explained by the durability of the goods produced in the sector. In contrast, differences in the degree of asymmetry of policy effects seem to be related to differences in financial structure, in particular the maturity structure of debt, the coverage ratio, financial leverage and firm size. JEL Classification: E4, E5
|Date of creation:||Aug 2002|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +49 69 1344 0
Fax: +49 69 1344 6000
Web page: http://www.ecb.europa.eu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bernd Hayo, 1999.
"Industry Effects of Monetary Policy in Germany,"
- Stephen D. Oliner & Glenn D. Rudebusch, 1994.
"Is there a broad credit channel for monetary policy?,"
Working Paper Series / Economic Activity Section
146, Board of Governors of the Federal Reserve System (U.S.).
- Stephen D. Oliner & Glenn D. Rudebusch, 1996. "Is there a broad credit channel for monetary policy?," Economic Review, Federal Reserve Bank of San Francisco, pages 3-13.
- Mike Artis & Hans-Martin Krolzig & Juan Toro, 2004.
"The European business cycle,"
Oxford Economic Papers,
Oxford University Press, vol. 56(1), pages 1-44, January.
- Artis, Michael J & Krolzig, Hans-Martin & Toro, Juan, 1999. "The European Business Cycle," CEPR Discussion Papers 2242, C.E.P.R. Discussion Papers.
- Artis, M. & Krolzig, H.-M. & Toro, J., 1999. "The European Business Cycle," Economics Working Papers eco99/24, European University Institute.
- Mike Artis & Hans-Martin Krolzig & Juan Toro, 2002. "The European Business Cycle," Economic Working Papers at Centro de Estudios Andaluces E2002/19, Centro de Estudios Andaluces.
- Anil K. Kashyap & Owen A. Lamont & Jeremy C. Stein, 1993.
"Credit conditions and the cyclical behavior of inventories,"
Working Paper Series, Macroeconomic Issues
93-7, Federal Reserve Bank of Chicago.
- Kashyap, Anil K & Lamont, Owen A & Stein, Jeremy C, 1994. "Credit Conditions and the Cyclical Behavior of Inventories," The Quarterly Journal of Economics, MIT Press, vol. 109(3), pages 565-92, August.
- Luca Dedola & Francesco Lippi, 2000. "The Monetary Transmission Mechanism: Evidence from the Industry Data of Five OECD Countries," Econometric Society World Congress 2000 Contributed Papers 1833, Econometric Society.
- Peersman, Gert & Smets, Frank, 2001. "Are the effects of monetary policy in the euro area greater in recessions than in booms?," Working Paper Series 0052, European Central Bank.
- Hamilton, James D & Perez-Quiros, Gabriel, 1996. "What Do the Leading Indicators Lead?," The Journal of Business, University of Chicago Press, vol. 69(1), pages 27-49, January.
- Vermeulen, Philip, 2002.
" Business Fixed Investment: Evidence of a Financial Accelerator in Europe,"
Oxford Bulletin of Economics and Statistics,
Department of Economics, University of Oxford, vol. 64(3), pages 217-35, July.
- Vermeulen, Philip, 2000. "Business fixed investment: evidence of a financial accelerator in Europe," Working Paper Series 0037, European Central Bank.
- Garcia, R. & Schaller, H., 1995.
"Are the Effects of Monetary Policy Asymmetric?,"
Cahiers de recherche
9505, Universite de Montreal, Departement de sciences economiques.
- René Garcia & Huntley Schaller, 1999. "Are the Effects of Monetary Policy Asymmetric?," Carleton Economic Papers 99-17, Carleton University, Department of Economics.
- Garcia, R. & Schaller, H., 1995. "Are the Effects of Monetary Policy Asymmetric?," Cahiers de recherche 9505, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- René Garcia & Huntley Schaller, 1995. "Are the Effects of Monetary Policy Asymmetric?," CIRANO Working Papers 95s-06, CIRANO.
- Joe Ganley & Chris Salmon, 1997. "The Industrial Impact of Monetary Policy Shocks: Some Stylised Facts," Bank of England working papers 68, Bank of England.
- Gerald Carlino & Robert Defina, 1998. "The Differential Regional Effects Of Monetary Policy," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 572-587, November.
- repec:dgr:rugsom:98c36 is not listed on IDEAS
- Azariadis, Costas & Smith, Bruce, 1998. "Financial Intermediation and Regime Switching in Business Cycles," American Economic Review, American Economic Association, vol. 88(3), pages 516-36, June.
- Peersman, Gert & Smets, Frank, 2001. "The monetary transmission mechanism in the euro area: more evidence from VAR analysis," Working Paper Series 0091, European Central Bank.
When requesting a correction, please mention this item's handle: RePEc:ecb:ecbwps:20020165. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Official Publications)
If references are entirely missing, you can add them using this form.