The Industry Effects of Monetary Policy in the Euro Area
Bibliographic Data
| ID | 9718260 |
|---|---|
| Authors | Gert Peersman (0000-0002-0480-1927, Ghent University), Frank Smets (0000-0003-2067-7505, European Central Bank, CEPR and University of Ghent) |
| Year | 2005 |
| Volume | 115 |
| Issue | 503 |
| Pages | 319-342 |
| Publication date | 2005-04-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/j.1468-0297.2005.00991.x |
| OpenAlex | W3124802807 |
| Language | EN |
| Citations received | 17 |
| References cited | 5 |
We first estimate the effects of a euro area-wide monetary policy change on output growth in eleven industries of seven euro area countries over the period 1980-98. 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. This can be regarded as evidence for the conventional interest rate/cost-of-capital channel. In contrast, differences in the degree of asymmetry of policy effects are related to differences in financial structure, in particular the maturity structure of debt, the coverage ratio, financial leverage and firm size. This suggests that financial accelerator mechanisms can partly explain cross-industry differences in asymmetry. Copyright 2005 Royal Economic Society
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| Unique citing works | 17 |
|---|---|
| Citations per year | 0.77 |
| Citation span | 2004 - 2025 (22) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 17 |