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Monetary policy transmission in the euro area: New evidence from micro data on firms and banks

Author

Listed:
  • Jean-Bernard Chatelain

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Andrea Generale

    (BI - Banca d´Italia)

  • Philip Vermeulen

    (ECB - European Central Bank - European Central Bank)

  • Michael Ehrmann

    (ECB - European Central Bank - European Central Bank)

  • Jorge Martínez-Pagés

    (Bank of Spain - Bank of Spain)

  • Andreas Worms

    (Bundesbank - Bundesbank)

Abstract

This paper presents an overview of the results of a research project on monetary transmission pursued by the Eurosystem, which has analysed micro data on firms and banks in several countries of the euro area in great detail. There is strong empirical support for an interest rate channel working through firm investment. Furthermore, a credit channel can be identified with firm micro data. On the bank side, there is evidence that lending reacts differently to monetary policy according to bank balance sheet characteristics. In particular, banks that have a less liquid asset composition show a stronger loan supply response. This finding may be due to banks drawing on their liquid assets to cushion the effects of monetary policy on their loan portfolio, which is in line with the existence of close relationships between banks and their loan customers.

Suggested Citation

  • Jean-Bernard Chatelain & Andrea Generale & Philip Vermeulen & Michael Ehrmann & Jorge Martínez-Pagés & Andreas Worms, 2003. "Monetary policy transmission in the euro area: New evidence from micro data on firms and banks," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00119489, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00119489
    DOI: 10.1162/154247603322391350
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00119489v2
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    monetary policy transmission; interest rate channel; credit channel; euro area; transmission de la politique monétaire; canal du taux d'intérêt; canal du crédit; zone Euro.;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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