How Effective is Monetary Policy at the Zero Lower Bound? Identification Through Industry Heterogeneity

Arsenios Skaperdas
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Arsenios Skaperdas: https://www.federalreserve.gov/econres/arsenios-skaperdas.htm

No 2017-073, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: US monetary policy was constrained from 2008 to 2015 by the zero lower bound, during which the Federal Reserve would likely have lowered the federal funds rate further if it were able to. This paper uses industry-level data to examine how growth was affected. Despite the zero bound constraint, industries historically more sensitive to interest rates, such as construction, performed relatively well in comparison to industries not typically affected by monetary policy. Further evidence suggests that unconventional policy lowered the effective stance of policy below zero.

Keywords: Industry heterogeneity; Unconventional monetary policy; Zero lower bound (search for similar items in EconPapers)
JEL-codes: E32 E43 E47 E52 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2017-07-07
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2017-73

DOI: 10.17016/FEDS.2017.073

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