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The cost channel of monetary policy: evidence from euro area firm-level survey data

Author

Listed:
  • Albertazzi, Ugo
  • Ferrando, Annalisa
  • Gori, Sofia
  • Rariga, Judit

Abstract

This paper explores empirically the cost channel of monetary policy transmission during the recent period of monetary policy tightening in the euro area. We combine unique data on firms’ selling price expectation from the Survey on the access to finance of enterprises (SAFE), information on firms’ borrowing from the euro area-wide credit register (AnaCredit) and ECB monetary policy surprises. Firms revise upwards their one-year-ahead selling price expectations following monetary announcements in a tightening cycle and this effect increases in firms’ working capital exposure. The paper provides supportive evidence on the existence of a cost channel of monetary policy, adding to our understanding of monetary policy transmission to firms in the euro area. JEL Classification: G30, E52, D84

Suggested Citation

  • Albertazzi, Ugo & Ferrando, Annalisa & Gori, Sofia & Rariga, Judit, 2025. "The cost channel of monetary policy: evidence from euro area firm-level survey data," Working Paper Series 3097, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20253097
    Note: 451871
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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