Monetary Policy, Price Setting, and Credit Constraints
Almut Balleer and
Peter Zorn (peter.zorn@econ.lmu.de)
No 14163, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Abstract:
We estimate the effects of monetary policy on price-setting behavior in administrative micro data underlying the German producer price index. We find a strong degree of monetary non-neutrality. After expansionary monetary policy, the mass of additional price adjustments is economically small and the average absolute size across all price changes falls. The aggregate price level hardly adjusts, and monetary policy has real effects. These estimates rule out quantitative structural models that generate small and transient effects of monetary policy through selection on large price adjustments. We provide evidence that monetary policy propagates primarily through production units with weak financial positions.
Keywords: Price setting; Extensive margin; Intensive margin; Monetary policy; Local projections; Menu cost; Credit constraints (search for similar items in EconPapers)
JEL-codes: E30 E31 E32 E44 E52 (search for similar items in EconPapers)
Date: 2019-12
New Economics Papers: this item is included in nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)
Downloads: (external link)
https://cepr.org/publications/DP14163 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
Related works:
Working Paper: Monetary Policy, Price Setting, and Credit Constraints (2019) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:14163
Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP14163
orders@cepr.org
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by (repec@cepr.org).